Why Casa Systems (CASA) stock surged over 55% today?

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Why Casa Systems (CASA) stock surged over 55% today?

Why Casa Systems (CASA) stock surged over 55% today?
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 Highlights

  • Casa Systems Inc provides a suite of software-centric infrastructure solutions. 
  • On April 18, the company announced receiving a multi-year purchase contract from Verizon Communications Inc. (VZ). Verizon will invest US$40 million in CASA stocks.
  • CASA stock fell 34.29% YTD and plunged 55.49% in one year. 

The Casa Systems, Inc. (NASDAQ: CASA) stock was up over 56% to around US$6.0 at 1:58 pm ET on Monday. However, the overall market was trading lower, with the benchmark S&P 500 index and the Nasdaq Composite down 0.13% and 0.48%, respectively.

On April 18, the company announced receiving a multi-year purchase contract from Verizon Communications Inc. (VZ). Verizon will also invest US$40 million in CASA common stock or a 9.9% stake in the cloud infrastructure company. 

Under the agreement, Casa Systems will provide 5G Core Network Functions to support Verizon's public Mobile Edge Compute (MEC) service. Verizon’s MEC technology moves computing resources into cloud servers. 

CASA Systems President and CEO Jerry Guo said the multi-year agreement is an important milestone for its 5G business and Security Gateway technology. 

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Why Casa Systems (CASA) stock surged over 55% today?

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Casa Systems:

Casa Systems Inc provides a suite of software-centric infrastructure solutions. Its solutions enable cable service providers to deliver video, voice, and data services on a single platform at high speed. The Massachusetts-based company’s product line comprises IP networks, mobile networks, cable networks, optical networks, and professional and managed services. 

For the fiscal year ended December 31, 2021, it earned a net income of US$3.2 million on revenue of US$401 million. In fiscal 2020, the net income was US$24.8 million on revenue of US$393 million. 

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The EPS diluted was US$0.04 in FY2021 compared to US$0.29 in FY2020.

The CASA stock touched the highest of US$9.95 and the lowest of US$3.68 in the last 52 weeks. Its current market capitalization is US$501 million, with a P/E ratio of 197. 

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Bottom line:

CASA stock fell 34.29% YTD and plunged 55.49% in one year at the closing price of US$3.89 on April 14. On the other hand, Verizon stock declined 2.65% YTD and dropped 6.71% in a year.    

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