Shares of Sierra Wireless Inc (SW) rose as much as 10% on Friday morning after the company reported a better-than-expected adjusted profit in its first quarter. Sierra Wireless provides IoT solutions that combine devices, network services, and software to unleash value in the connected economy.
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Total revenue came in at $108.1 million for the quarter ended March 31, up 4.9% year-on-year and beating the Zacks Consensus Estimate by 5.47%. The increase in revenue was mainly driven by Connectivity, Software, and Services revenue which rose 26% to $33.7 million.
Meanwhile, the wireless broadband modem maker reported a net loss of $29.9 million in Q1 2021 ($0.81 per share), compared to a net income of $22.7 million ($0.62 per share) in Q1 2020.
Adjusted for one-time gains and costs, the loss was $0.26 per share in the first quarter, better than the loss of $0.53 per share reported in the prior-year quarter. The average estimate among analysts polled by Zacks Investment Research was for a loss of $0.27 per share.
Sierra Wireless’ President and CEO Kent Thexton said. “Demand for our Internet of Things (“IoT”) products and gateways remains strong with Q1 orders up over 30% year over year, and we are working closely with all our supply chain partners to build and ship our products to our customers. The requirement for real-time monitoring of assets and advanced edge processing is growing in importance as more industrial and enterprise companies are digitizing their assets. With our IoT devices, connectivity service and edge-to-cloud tools, Sierra Wireless is the trusted supplier for IoT solutions.”
For the second quarter of 2021, Sierra Wireless expects its revenue to be between $118 million and $122 million. (See Sierra Wireless Inc stock analysis on TipRanks)
Yesterday, Canaccord Genuity analyst Michael Walkley maintained a Buy rating on SW with a price target of $26.00 (C$31.64) for 78.7% upside potential.
Overall, consensus on the Street is that SW is a Hold based on 3 Buys, 4 Holds, and 2 Sells. The average analyst price target of C$23.93 implies 34.2% upside potential from current levels. Shares have risen 60% over the last year.
TipRanks’ Smart Score
SW scores a 6 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock’s returns are likely to perform in line with the market.
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