FIO reports tonight. For me its a do or die quarter. The reason being:
1. Demand for their offerings was high (as per the chatter from analysts and similar companies)
2. Flash prices have come down significantly this quarter. (Apple was able to translate this decline to a significant increase in gross margins. I am expecting the same for FIO.)
The macro trends favor a significant beat for FIO tonight. Both aspects of the business were favorable (costs were down and demand was up).
I really like management and the segment of the business, but if there is ever a more beautiful quarter for this company to beat, its this one. If FIO can not translate huge benefit from this quarter, then their business model is not conducive to scale any macro benefits. As which point I will no longer trade the stock.
From my current analysis, FIO should be able to benefit from the favorable macro trends. Hence, I am playing FIO one into earnings, and am expecting margin expansion and profitability.
No comments:
Post a Comment