As we find ourselves on the verge of yet another earnings season, I wanted to take a closer look at the upcoming earnings for one particular company in the communications equipment sector and share my thoughts on what needs to happen in order for Barracuda Networks Inc. (CUDA) to meet and/or surpass analysts' expectations.

Company Overview

Headquartered in Campbell, California, Barracuda Networks, Inc. designs and delivers security and storage solutions. It offers cloud-connected solutions that help its customers address security threats, enhance network performance, and protect and store their data.

Recent Trend Behavior

On Wednesday, shares of CUDA, which currently possess a market cap of $1.43 billion, a forward P/E ratio of 106.81, and a price-to-sales ratio of 5.87, settled at a price of $27.77/share. Based on a closing price of $27.77/share, shares of CUDA are trading 5.64% above their 20-day simple moving average, 4.55% above their 50-day simple moving average, and 9.02% below their 200-day simple moving average.

These numbers indicate a short-term uptrend for the stock and a long-term downtrend for the stock, which generally translates into a buying mode for most near-term traders and a selling mode for many long-term investors.

If the company can demonstrate a stronger-than-expected earnings performance when it announces FQ2 results on October 9, there's a very good chance the company's trend behavior will continue to move in a fairly positive upward direction.

Upcoming Earnings Outlook

When it comes to the company's upcoming FQ2 earnings, there are a number of things potential investors should consider. For instance, analysts are currently calling for CUDA to earn $0.04/share in terms of EPS (which is $0.03/share lower than what the company had reported during FQ1) and $66.76 million in terms of revenue when its latest earnings are released on October 9.

In order to meet and/or exceed its quarterly EPS estimates, I'd like to see a 10%-to-15% increase in the company's FQ2 gross billings (as compared to FQ1's gross billings of $87.6 million), a 3%-to-5% increase in EBITDA (as compared to FQ1's EBITDA of $19.4 million), and lastly, a 1.5%-to-3% increase in the company's revenues (as compared to FQ1's revenues of $66.2 million).

Conclusion

For those of you who may be considering a long-term position in Barracuda Networks, I'd actually recommend keeping a closer eye on the company's upcoming earnings that are due on October 9, as a strong quarterly performance could fuel an improved trend performance over the next 20, 50 and 200 day periods. If the company meets or exceeds analysts’ estimates, there's a very good chance shares will begin trading in the $30/share-to-$34/share range before we know it.