Airspan Networks, Inc. (AIRN)

Ganndalf (< 20) Submitted: 9/07/07 9:00 PM : Start Price: $3.99 AIRN Score: -79.94

Airspan Networks is down 44% since I picked it in Caps. Why? And what about the future for Airspan, more importantly. Ceragon networks, another wi-max equipment company, has been my best Caps pick so far, up about 200%. I'm going to focus on the numbers to start off with.

Airspan had $27M in revenue last quarter and Ceragon had $34 M, so there's not a huge difference in their revenue.
Airspan's revenues for 2005 and 2006 were $111 M and $128 M respectively- not indicative of any great success on that front yet. Quarterly revenue these past quarters has seen little to no growth either. At the very least, they are showing a gross profit which inspires some hope yet. The problem is that SG&A and R&D are eating up all that profit and then some, so if they can reach what educated people call "economy of scale" net profitability is likely to follow, i.e. revenues need to get alot bigger. So going back to the income statement, net profits have continued to be negative with really no sign of improvement , judging purely by the numbers. Ceragon Networks, on the other hand has broken into profitability this year and is ramping up their revenue. Profit margins this quarter at Airspan were -53% compared to almost +8% for Ceragon.

One of the biggest differences I see is that Ceragon had $12M in gross profits while Airspan had only $8M in gross profits, but in addition to that, SG&A and R&D expenses were both higher for Airspan.

Caps player Peckmania says, "Airspan is down right now because they are still phasing out their old products to make room for WiMax. With patience, this will be a good long-term investment." Maybe he's right.

Good news of late is that they got a nation-wide contract in Jordan.

From what I've seen so far, this could turn out to be a great investment (like Ceragon), but it might not. I'm not quite ready to commit either way. I'm leaning towards a positive view, however. Wi-Max deployment is just taking baby steps right now, but after a few years it may be running like the wind. I think it will, and so does my old buddy Intel, who is right more often than I care to admit.

There's actually been very little written in the Media on Airspan, so they're somewhat ignored obviously. They do seem to have a pretty kool website though so check that out if you like: www.airspan.com And lastly I have some resources to more Wi-Max stuff over at my Ceragon pitch.

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