Seeking Alpha

Cyan -22.6%, preliminary Q4 revenue of $20M-$21M short of guidance by a third

  • Cyan (CYNI) shares crater 22.6% AH following the company's preliminary revenue announcement of $20M-$21M, miles below the previous $30M-$33M guidance and analyst expectations of $31.3M.
  • The company attributed the decline to an 88% Q/Q decrease in revenue from its largest customer to $2M.
  • a silver lining: revenue on the year expanded 32%-34% Y/Y to $70M-$71M excluding the largest customer as Cyan diversifies its base.
Comments (13)
  • Mike Arnold, CFA
    , contributor
    Comments (1823) | Send Message
     
    The customer concentration was the biggest risk in owning these shares. Might be looking for a new entry point after this sorts itself out.
    6 Jan, 04:43 PM Reply Like
  • pilot fish
    , contributor
    Comments (115) | Send Message
     
    Ouch! Not a good way to start my portfolio of this year....
    6 Jan, 04:47 PM Reply Like
  • hnt1987
    , contributor
    Comments (44) | Send Message
     
    It's Q4 of 2013 result that drag the prices downward. CYNI already stated that Windstream will buy less from them in mid-2013; concurrently, CYNI is expanding with new customer based overseas and in the U.S. With this technology sector, companies (cloud services, online security, mobile operator, etc...) have to upgrade constantly in order to produce profits and reduce overall costs.
    CYNI will turn around in 2014 with their Blue Planet strategy. If Google jumps in with new orders, this stock will be flying like hot-pancakes.
    I am this boat with you. Bad start but huge potentials down the road, looking ahead in 2014.
    6 Jan, 05:51 PM Reply Like
  • JeffreyLangBoyd
    , contributor
    Comments (663) | Send Message
     
    They always did seem a little too anxious to sell shares.
    6 Jan, 04:52 PM Reply Like
  • hnt1987
    , contributor
    Comments (44) | Send Message
     
    CYNI plunged because of a decrease of orders from Windtream Holding. When CYNI went public back in May 2013, the "company" already stated ahead of time that orders from Windstream would decline in 2013 and CYNI would reduce their overall capital expenditures.
    On a positive spin, the other customers jumped 34%, an increase of 2% in 2013 vs 32% in 2012. If you do your research, their Blue Planet all-in-one system is racking up a lot of new customers. E.g. Arista, Accedian, Boundary, Canonical, Connectem, Embrane, Mellanox, Metaswitch, Omnitron, Overture, Pica8, RAD, Red Hat and RYU.
    CYNI will pick up steam in 2014 with oversea expansion in Asia and the Middle East. I am longing this stock. I jumped in this stock 2 days early @ $5.30. Even though it's at $4.00 after hour today, this stock should be bulling ahead in 2014.
    6 Jan, 05:42 PM Reply Like
  • burgess123
    , contributor
    Comment (1) | Send Message
     
    What does. That mean in layman terms I have 41000 shares
    6 Jan, 06:59 PM Reply Like
  • hnt1987
    , contributor
    Comments (44) | Send Message
     
    I bought CYNI around $5.30; even though it's 23% drop after hour today, I will continue holding long on this one and bite through the pain. If you invest in networking technology, you have to understand that they goes through a cycle (the old "obsolete" insufficient & inefficient will get replace). They just start their Blue Planet strategy "All-in-one" system this year (Cloud, data center SDN, Ethernet, etc...) which running much more efficient than Cisco system + international expansion recently.
    Growth does not come in by mid 2014, this is why i dont care much about today's Q4-2013 result. If you buy around the IPO price and see the big crater, I would get out. If you bought at their low of $4 and $5 like me, I am longing this one.
    6 Jan, 07:36 PM Reply Like
  • hnt1987
    , contributor
    Comments (44) | Send Message
     
    And I forgot CYNI big attraction last year was an order from Colt Europe.
    6 Jan, 07:39 PM Reply Like
  • buyonpanic
    , contributor
    Comments (49) | Send Message
     
    In my opinion, this is a "trade play" throughout 2014. Was lucky enough to buy twice around $4 and sell around $5. As has been stated, they projected the revenue hit from biggest customer.....but obviously didn't expect the magnitude or it's guidance would not have missed by so much. They have constantly stated that they will not be profitable until 2015 but the trajectory of lower losses has been good before this announcement.

     

    In long run I like it due to Blue Planet and see it's potential to be at $6 within the next 12-15 mths. In short term I wouldn't jump back in just yet....wait until you see some positive news momentum as you might see it dip further or hover for a period causing you to miss on some better opportunties. The other concern is any stock with negative revenue momentum is more vulnerable if market pulls back. Just one person's opinion.
    7 Jan, 08:44 AM Reply Like
  • hnt1987
    , contributor
    Comments (44) | Send Message
     
    JPM is on board with this one. They are some smart cookies over in NYC
    7 Jan, 09:09 AM Reply Like
  • buyonpanic
    , contributor
    Comments (49) | Send Message
     
    One more thing about this. I don't see why public companies don't have to pre-communicate ALL earnings/revenue announcements. They let everyone know when they will report qtrly earnings but rarely announce when they are going to give preliminary guidance. I think that is a real disservice to the investing public who may want to put a stop loss in place for a "just in case" situation like this one...especially with a newer public company. Futhermore, why would the company make such an announcement at this time? Knowing that your investors are going to take a huge hit? Seems to me they would have been better off to just wait until the regular qtrly earnings report. I'm glad I was blessed/fortunate enough to be out but I would have not been happy if I just bought in and got monkey hammered....especially since most would have waited until after any earnings report if they had known it was coming.
    8 Jan, 09:39 AM Reply Like
  • hnt1987
    , contributor
    Comments (44) | Send Message
     
    I like the company's transparency on the report. If they wait until Feb, the drop may be 3-4x worse than the Jan 6th report.
    8 Jan, 04:35 PM Reply Like
  • buyonpanic
    , contributor
    Comments (49) | Send Message
     
    3-4x worse than a 30% drop?? I think that's mathmatically impossible....the stock would be close to zero or below
    9 Jan, 08:51 AM Reply Like
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