A10 Networks (NYSE:ATEN) Shares Gap Up on Strong Earnings

Key Points

• A10 Networks gapped up its shares to $19.10 after reporting quarterly earnings of $0.21 per share, exceeding analysts' expectations of $0.20.
• The company reported a revenue of $69.38 million, a 15.5% year-over-year increase, and analysts adjusted their price targets, with BWS Financial setting a new target of $24.00.
• Insider selling occurred, with General Counsel Robert Scott Weber selling 2,500 shares at an average price of $17.26, leading to a 3.94% decrease in his position.

A10 Networks, Inc. (NYSE:ATEN - Get Free Report)'s share price gapped up prior to trading on Wednesday following a stronger than expected earnings report. The stock had previously closed at $17.79, but opened at $19.10. A10 Networks shares last traded at $18.33, with a volume of 318,258 shares changing hands.

The communications equipment provider reported $0.21 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.20 by $0.01. A10 Networks had a net margin of 18.45% and a return on equity of 25.46%. The business had revenue of $69.38 million during the quarter, compared to the consensus estimate of $65.99 million. During the same quarter last year, the firm earned $0.18 earnings per share. The firm's quarterly revenue was up 15.5% compared to the same quarter last year.

A10 Networks Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Tuesday, September 2nd. Stockholders of record on Friday, August 15th will be paid a dividend of $0.06 per share. This represents a $0.24 annualized dividend and a dividend yield of 1.4%. The ex-dividend date of this dividend is Friday, August 15th. A10 Networks's payout ratio is currently 35.29%.

Analysts Set New Price Targets

Several research firms have recently weighed in on ATEN. BWS Financial reaffirmed a "buy" rating and set a $24.00 price target on shares of A10 Networks in a research note on Friday, May 2nd. Mizuho began coverage on shares of A10 Networks in a research note on Monday, July 14th. They set a "neutral" rating for the company. Wall Street Zen downgraded shares of A10 Networks from a "buy" rating to a "hold" rating in a research note on Saturday, August 2nd. Deutsche Bank Aktiengesellschaft began coverage on shares of A10 Networks in a research note on Friday, June 27th. They set a "buy" rating and a $22.00 price target for the company. Finally, Craig Hallum raised shares of A10 Networks from a "hold" rating to a "buy" rating and set a $20.00 price target for the company in a research note on Friday, May 2nd. Three equities research analysts have rated the stock with a hold rating and four have issued a buy rating to the company's stock. According to MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and a consensus price target of $22.00.

Insider Buying and Selling

In related news, General Counsel Robert Scott Weber sold 2,500 shares of the business's stock in a transaction that occurred on Tuesday, May 27th. The shares were sold at an average price of $17.26, for a total value of $43,150.00. Following the completion of the transaction, the general counsel owned 61,007 shares of the company's stock, valued at $1,052,980.82. The trade was a 3.94% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available at the SEC website. 1.15% of the stock is owned by company insiders.

Hedge Funds Weigh In On A10 Networks

A number of large investors have recently bought and sold shares of ATEN. Boston Trust Walden Corp acquired a new position in shares of A10 Networks during the first quarter worth $26,894,000. Penserra Capital Management LLC increased its position in shares of A10 Networks by 56.2% during the second quarter. Penserra Capital Management LLC now owns 3,964,989 shares of the communications equipment provider's stock worth $76,722,000 after purchasing an additional 1,425,792 shares in the last quarter. Wellington Management Group LLP increased its position in shares of A10 Networks by 390.9% during the first quarter. Wellington Management Group LLP now owns 1,130,119 shares of the communications equipment provider's stock worth $18,466,000 after purchasing an additional 899,919 shares in the last quarter. Invesco Ltd. increased its position in shares of A10 Networks by 184.7% during the first quarter. Invesco Ltd. now owns 1,045,406 shares of the communications equipment provider's stock worth $17,082,000 after purchasing an additional 678,207 shares in the last quarter. Finally, Marshall Wace LLP increased its position in shares of A10 Networks by 364.8% during the fourth quarter. Marshall Wace LLP now owns 683,711 shares of the communications equipment provider's stock worth $12,580,000 after purchasing an additional 536,600 shares in the last quarter. Institutional investors own 98.61% of the company's stock.

A10 Networks Stock Performance

The business has a 50-day moving average price of $18.49 and a 200-day moving average price of $18.17. The firm has a market capitalization of $1.26 billion, a price-to-earnings ratio of 25.59, a P/E/G ratio of 4.00 and a beta of 1.35. The company has a quick ratio of 3.87, a current ratio of 4.23 and a debt-to-equity ratio of 1.07.

About A10 Networks

A10 Networks, Inc provides networking solutions in the Americas, Japan, rest of Asia Pacific, Europe, the Middle East, and Africa. The company offers Thunder Application Delivery Controller that provides advanced server load balancing; Thunder Carrier Grade Networking, which provides standards-compliant address and protocol translation services between varying types of internet protocol addresses; Thunder Secure Sockets Layer (SSL) Insight that decrypts SSL-encrypted traffic and forwards it to a third-party security device for deep packet inspection; and Thunder Convergent Firewall, which addresses multiple critical security capabilities in one package.