The company beat earnings estimates by a fairly large amount as it continues to grow despite the robust competition.
This is in line with what we expected, where it has a couple of key products that are taking up the slack from the lag in the demand for its legacy.
We continue to believe that LogMeIn can go higher as it tackles the Internet of Things.
LogMeIn (NASDAQ:LOGM) posted another strong quarter last week, sending shares up 5% in a day. Its Q2 earnings beat consensus by 20%, marking the fourth straight quarter of earnings beats. EPS came in at $0.29 (beating $0.24 consensus) and revenue was $55 million (beating $52.5 million consensus). Driving the Q2 earnings beat was its join.me products (which saw 100% y/y growth for the quarter) and demand for its Xively product (which is tackling the Internet of Things). The company guided Q3 EPS to $0.27 to $0.28, which was above previous consensus of $0.26.
We first profiled LogMeIn back in November, since then shares are up 33%. Now trading at $42 a share, the stock has inched its way above our $37 fair value estimate. It still has no debt and 20% of its balance sheet is covered by cash on the balance sheet. The average analyst price target is $55 (still 27% higher than current levels).
As we noted in September:
"So, what Xively is doing is expanding LogMeIn's total addressable market. For 2012, LogMeIn was tackling a $5 billion market that covered access/collaboration and customer care, and by 2015, it expects to have a total addressable market of $13 billion, thanks in large part to its attack on the Internet of Things and cloud storage markets."
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