Keep an eye on shares of Capstone Turbine (CPST) on Thursday. The company is set to report with analysts predictin, on average, a loss of two cents per share, better numbers than during the same period of last year, but still under the ultimate goal of profitability, which has thus far eluded this company.
More important than the actual losses, however, will be the recognized trend. Investors will want more evidence of improved margins and realized progress in moving heftily through the backlog that has been growing in size and scope, thanks to some large orders over the past few quarters.
Any surprises could lead to a quick spike in share price, but until profitability is met, then CPST is likely to continue carrying a high short interest while trading with the same volatility seen over the past year. As always, the could be a nice pick-up for these dollar-and-below prices.
While revenues and future prospects for the company have been on the rise, the share price has not. After pushing to the two dollar mark last year following a mention by US President Barak Obama during a speech in Brazil, CPST has continued on a downward slide that could not even be reversed by a positive CEO interview on CNBC a couple of months ago.
Capstone also has an intriguing relationship with General Electric (GE) that is worth monitoring and some speculation has led to talk that the company could eventually be purchased by a larger player in the industrial sector, such as GE, Caterpillar (CAT) or Cummins (CMI).
On Thursday, though, all eyes will be on the earnings numbers.
Disclosure: Long CPST.