As mobile data usage continues to grow exponentially around the world, Bridgewater Systems' suite of policy and data management solutions should continue to become more popular among carriers as they attempt to meet the increasing demand from consumers and businesses.
On Friday, Bridgewater Systems announced a contract with Verizon (VZ.NYSE) for its Widespan product estimated to be work over $18 million. Most of the revenue should be recognized by H2 2010, but with no impact on 2009 revenue. This should have meaningful impact on FY 2010 revenue and earnings forecasts. Forecasted revenue could increase between 12% and 18% above consensus depending upon the recognition of revenue, while EPS could be ahead of 2010 forecasts by between 80% and 100%. Expect analysts to increase targets substantially, which should continue to impact positively the share price momentum.
Today, BWC announced a deal with four US carriers to launch 4G services to over 500 rural American communities. It appears that the products and services included are: Service Controller including the Prepaid Integrator Module, the Policy Controller, and the Subscriber Data Broker(TM).
As part of the Obama administration's stimulus spending plan, Bridgewater Systems should derive some benefit from a total of $7.2 billion in grants and loans that are being made available by the U.S. Commerce Department's National Telecommunications and Information Administration (NTIA) and the USDA's Rural Utilities Service to accelerate the deployment of broadband infrastructure services in areas of the country that are underserved by high-speed infrastructure. The terms of the contract were not disclosed.
Also today, BWC unveiled its Long Term Evolution (LTE) product suite for its subscriber, service, and policy control solutions.Several global trials are in the planning and implementation stage. Investors should see BWC on the forefront of major LTE rollouts as they begin by 2012 or 2013.
The bottom line is this: The company continues to sign significant contracts in the short-term, and appears to be working with its global client base to establish a leadership position in the long-term as LTE is deployed. As mobile data usage grows and the management of it becomes exponentially complicated, BWC is well positioned to gain increasing market share.
Analysts and investors should continue to like this stock on a fundamental basis. Stock is moving up today on the news.
Disclosure: I own shares of BWC