BigBand Networks Hits Low Close Ahead Of Earnings (BBND)

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On Thursday afternoon, we’ll get to see the first real quarter from BigBand Networks (NASDAQ:BBND).  The broadband network-based platform equipment maker has had a rough time of it since coming public earlier this year.  Unfortunately, this is a recent IPO and trusting consensus estimates requires faith that everyone is close and requires faith that even the estimates are accurate.  Please note that because of being skeptical and because of seeing so many crazy reports on post-IPO earnings, we give very little emphasis on earnings estimates for very new public companies and caution against any absolute estimates.

Shares fell almost 4% to $12.49 and hit a new post-IPO low close on Wednesday, even if shares did recover almost 3% off the $12.17 intraday lows.  It looks like estimates are $0.07 EPS and $55.2 million in revenues, with next quarter estimates at $0.08 EPS on $60.1 million in revenues.  Once again, please check estimates on your own as new companies can be guesswork.

The three main analysts that started coverage on the stock all started this with a positive rating, so they’ve been feeling some heat on this one.  This was also touted by Jim Cramer, even thnough he did back off the initial rosy calls he made.  If options can be trusted on a company this new, it looks like on a static basis that options traders are prepared for shares to move up to $0.90 or so in either direction.

A conference call is scheduled for tomorrow evening.  With shares off almost 50% from the post-IPO highs, this one has not bee very fun to watch.  This one is hard to have any conviction with no real history.

Jon C. Ogg
August 1, 2007