Great Trends Portend Higher Price

With tech stocks still on the move, we have identified another unique technology play that has succeeded in growing revenue despite the tough environment..

Georgia-based Concurrent Computer Corporation (NASDAQ – CCUR - $6.66) was founded in 1966 and generates revenue through two disparate segments serving customers across the globe...

The Video Solutions segment offers IT solutions for video screens, DVR technology, network video access solutions, data analysis and warehousing solutions.  The Real-Time Products segment products include RedHawk Linux, a POISIX- compliant real-time Linux operating system, NightStar Tools debugging software, Simulation Workbench and Signal Workbench, which are real-time hardware in-loop simulations and data and monitoring systems for engine and other vibration test applications, respectively.

CCUR has recently expanded its product line and support services in the Video Solutions segment which has helped drive top-line growth.  Its expanded  MediaHawk VXTM offering for Smart TV’s allows operators to reach new customers on Internet connected TV’s and eliminate the need for set-top box terminals.  Plus, it launched the new Multi-screen Video Assurance Services, which is designed to help operators identify issues that could affect service.  Finally, in the Company’s other segment, GE (NYSE – GE) and Mitsubishi Heavy Industries have chosen CCUR for design testing solutions.

Yesterday, CCUR announced positive 2Q13 financial results.  Revenue for the period  was $16.6 million, up from $16.4 million in 2Q12, and more importantly, was up from $15.0 million in 1Q13.  Gross margin for 2Q13 improved to 57.5% up from 54.8% in 2Q12, but down from 58.7% in 1Q13, due to the product mix, but that should reverse itself in future quarters. EPS for the period was $0.08, which was a major improvement over the loss of ($0.10) in 2Q12 and a profit of $0.04 in 1Q13. If this trend continues, CCUR is likely to have a strong year. 

Figure 1: CCUR 200-day EMA

(Source: Yahoo! Finance)

Figure 1 above illustrates the 200-day EMA for CCUR.  With a breakout and new 52-week high earlier this week, it looks like the stock, driven by fundamental and technical events, could reach the $8.50 range.

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

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