2023-03-20 04:26:55 ET
Summary
- Casa reported Q4 earnings last week that were slightly above expectations and showed a small profit. Despite that, the stock price has tanked 63% on low volume since then.
- Casa needs to refinance its debt by the end of the year. It also forecasted 2023 revenue below analyst expectations. Both of these issues are weighing on the stock.
- Casa is now trading below a 0.5x revenue multiple.
- Last year, Casa signed a long-term deal with Verizon, which included a 9.9% equity investment at $4.24 for $40 million.
- All things considered, I think the drop in the stock price was overdone, and Casa is due for a bounce. The relationship with Verizon could be a wild card that provides more upside.
For further details see:
Casa Systems: The Sell-Off Is Overdone