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Snowball research notes – price crash series

Why DASAN Zhone Solutions Shares Crashed 18%?

by | Mar 2, 2019

DASAN Zhone Solutions

M. Cap: $197 million

The company is a global leader in fiber access transformation for enterprise and service provider networks.

Summary

In the last three days, the shares of DASAN Zhone crashed 18%. A few days previously, on February 28, 2019, the company released its financial result for the fourth quarter and FY 2018. Even though the financials are inline with the company’s guidance, the company’s stock price crashed significantly – this could be due to the fact that for a few key metrics the company achieved the lower-end of its target and incurred net losses (due to one-time expenses) in Q4 2018.

Additional notes

Fourth Quarter 2018 Financial Performance:

  • Revenue was $74.7 million, which was inline with the company’s guidance and an increase of 8.8% year-over-year.
  • Non-GAAP adjusted EBITDA was $3.0 million, which was inline with the company’s adjusted EBITDA guidance of between $3 million and $4 million.
  • GAAP net income attributable to DZSI was $(1.3) million. Without the inclusion of non-recurring operating expenses, the company would have generated a positive net income.

Full Year 2018 Financial Performance:

  • Revenue was $282.3 million, which reflected an increase of 14.3% year-over-year.
  • Non-GAAP adjusted EBITDA was $12.0 million, which exceeded the company’s adjusted EBITDA guidance of $11.5 million.

Full Year 2019 Revenue Guidance:  Revenue target of $345 million to $360 million.

DASAN Zhone Solutions Reports Fourth Quarter and Fiscal Year 2018 Financial Results

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