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Tuesday, January 19, 2021

Acacia Communications Inc. (NASDAQ:ACIA) Stock is Soaring, Here is Why

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Acacia Communications Inc. (ACIA) shares are trading at higher $69.25 and the avg recommendation for the stock is Moderate Buy, while the current analyst price target stands at $70.00.

To add more color to this target, the company’s high over the last year is $69.17 and the low is $60.62. Over the last 52 weeks, ACIA is up 3.73% while the S&P 500 is up 15.13%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, ACIA reported a profit of $79.92 million. Acacia Communications Inc. also saw revenues increase to $158.46 million. In addition, ACIA has free cash flow of $66.67 million as of 09-2020. The company’s EBITDA came in at $27.74 million which compares well with its peers.

ACIA booked profit margins of 12.60%, its Return on Equity (ROE) is 11.10%, and its Return on Assets is 9.00%. All told, it is clear that, ACIA needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. ACIA has a short ratio of 8.27 and outstanding shares of 42.06M.

Company Outlook

ACIA has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 0.76 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 1.60. Acacia Communications Inc. ACIA also noted assets of $831.01 million at the end of the last quarter. Investors should also keep an eye on sector updates as ACIA has historically followed its peers on positive news.

All told, Acacia Communications Inc. ACIA has strung together solid data and demonstrated underlying fundamentals. At its current valuation, ACIA represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Acacia Communications Inc. ACIA is now commanding a market cap of 2.91B and a float of 38.82M. ACIA is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of ACIA stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in ACIA, either long or short, and we have not been compensated for this article.

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