Acacia Communications, Inc. (NASDAQ:ACIA) shares rallied over 23% to $83.50 in pre-market trading Friday, after the optics component maker blew away expectations for its second-quarter earnings, posting earnings of $0.77 per share on revenue of $116.2 million, topping Wall Street estimates of $0.30 per share on revenue of $85.78 million.
In reaction, Needham analyst Alex Henderson raised his price target for the stock to $100 (from $65), while reiterating a Buy rating. The new price target represents a potential upside of 48% from last closing price.
Henderson commented, “Acacia reported an exceptional quarter coming in substantially ahead of the highest forecast on the street with Revenues up 100% yearover-year and 36% above our forecast. EPS of $0.77 dwarfed our estimate of $0.28 and increased 370% year-over-year from $0.16. The “Super-Cycle” dynamics of strong growth from China, strong demand from Metro Core, and strong demand from the Data Center Interconnect (DCI) market drive the growth and keeps Acacia supply constrained in CY3Q and into year-end. Acacia expects additional orders in all three markets to keep demand strong. We are sharply increasing our estimates and our Target Price.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Alex Henderson has a yearly average return of 5.3% and a 51% success rate. Henderson has a 39.9% average return when recommending ACIA, and is ranked #568 out of 4110 analysts.
Out of the 4 analysts polled by TipRanks, 3 rate Acacia Communications, Inc. stock a Buy, while 1 rates the stock a Hold. The stock’s consensus target price is under review.