Procera Networks (PKT) is a Zacks #1 Rank (Strong Buy) after making a sustained move into profitability. Strong EPS beats and higher estimates make this stock attractive to aggressive growth investors.

Company Description

Procera Networks, Inc. provides network traffic awareness, analysis and control solutions for broadband service providers. It offers intelligent policy enforcement solutions that enable mobile and broadband network operators and entities to manage private networks.

PKT Tops Expectations Three Straight Times

PKT has beaten the Zacks Consensus Estimate in each of the last three quarters. One of the beats, in the September 2011 quarter saw the company post earnings of $0.14, $0.18 ahead of the Zacks Consensus Estimate of a loss of $0.04. The stock then moved higher by 24% after that 450% beat.

The string of beats started in the June 2011 quarter when the company posted EPS of one cent, but that was five cents ahead of the Zacks Consensus Estimate of a loss of four cents. The stock moved higher by nearly 5% following the report.

PKT Recently Reported Earnings

On February 21, 2012 the company reported revenue of $16 million roughly $4 million more than the Zacks Consensus Estimate and double the $8 million reported in the year ago period. EPS of $0.12 was $0.08 ahead of the estimate or a 200% beat. As a result the stock moved higher by about 7%.

Earnings Estimates Bumped Up

Following the most recent earnings report, analysts bumped up their earnings estimates for 2012. The Zacks Consensus Estimate for 2012 EPS moved from $0.35 in February 2012 to the current level of $0.41.

Valuations

Due to the recent shift to profitability, metrics like PE can now be computed. This means some pretty high numbers for a small company. A trailing PE of 86x means that it's very likely to be higher than just about any industry average, but as earnings continue to come in this metric will fall. The same can be said about forward PE. A price to sales metric of 7x will also come back to the industry average of 2.5x as sales increase in the next few quarters.

The Chart

The chart shows just what aggressive growth investors are looking for, a consistent upward trend. The stock crossed its 200 day moving average line about five months ago and hasn't looked back since. Many stocks can say this, but as PKT continues to grow its sales and earnings, more investors will dial up this telecommunications play. PKT is a Zacks #1 Rank (Strong Buy).

Procera Networks, Inc. (AMEX:PKT)
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