Demandware Likely Has Further Downside To Go
Alpha Gen Capital
Alpha Gen Capital
Demandware: Don't Ignore The Competition
Wed, Jun. 1, 3:00 PM
Wed, Jun. 1, 12:45 PM
Wed, Jun. 1, 9:14 AM
Wed, Jun. 1, 7:45 AM
- Demandware (NYSE:DWRE) +55.9% premarket after Salesforce.com (NYSE:CRM) agrees to acquire the provider of software to design e-commerce websites, in a deal worth ~$2.8B; CRM -2% premarket.
- CRM's cash offer of $75/share represents a 56.3% premium to DWRE's closing price yesterday.
- CRM expects the deal to raise its FY 2017 revenue by $100M-$120M while reducing adjusted EPS by $0.07; CRM also expects FQ2 adjusted EPS of $0.21-$0.22 and revenue of $2.01B-$2.03B.
- DWRE's clients include Lands' End, L'Oreal and Marks and Spencer Group.
Wed, Apr. 27, 4:16 PM
- Demandware (NYSE:DWRE): Q1 EPS of $0.06 beats by $0.05.
- Revenue of $67.1M (+33.5% Y/Y) beats by $2.48M.
Tue, Apr. 26, 5:35 PM
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Wed, Feb. 10, 2:19 PM
- Though Demandware (NYSE:DWRE) beat Q4 estimates, the company has widened its 2016 constant currency bookings growth target range to 25%-35% to account for "the potential for longer closing timelines with large enterprise accounts and some softness in Europe."
- The e-commerce software/services firm is guiding for Q1 revenue of $63.5M-$64.5M vs. a $64.5M consensus, and 2016 revenue of $295M-$305M ($260M-$270M subscription) vs. a $302.3M consensus. 2016 net income guidance is at $6M-$8M.
- Live customers rose by 33 Q/Q to 341, and live sites by 107 to 1,506. Contract backlog rose 29% Y/Y to $594.6M. Non-GAAP operating expenses rose 13% Y/Y to $44.1M (compares with 51% revenue growth).
- Subscription revenue is expected to grow 30%-35% in 2016 - on the earnings call (transcript), Demandware says the outlook assumes 25%+ bookings growth, high-teens comparable customer GMV growth, and churn of less than 5%. CFO Tim Adams: "If we assume a moderate slowdown in comparable customer GMV to the mid- to high-teens, bookings growth of 25% and a churn less than 5%, we believe we will deliver at least 30% growth in subscription revenue over the next three years to five years."
- Demandware's Q4 results, earnings release
Tue, Feb. 9, 4:22 PM
- Demandware (NYSE:DWRE): Q4 EPS of $0.38 beats by $0.16.
- Revenue of $75.56M (+43.9% Y/Y) beats by $2.98M.
Mon, Feb. 8, 5:35 PM
Fri, Feb. 5, 11:01 AM
- A long list of enterprise software and security tech names are off sharply after business intelligence/analytics software upstart Tableau (down 45.3%) reported slower-than-expected license revenue growth and issued below-consensus Q1/2016 guidance.
- Also possibly weighing: LinkedIn (down 39.6%), which derives a large % of its revenue from cloud-based recruiting and sales tools for enterprises, issued weak Q1/2016 guidance.
- Given the magnitude of the drops, margin calls and forced selling by funds could be playing a big role. The Nasdaq is down 2.2%.
- Tableau suggested its growth slowdown has to do with softening IT spend and a need to improve sales productivity, but analysts have raised questions about competition from the likes of Microsoft, Amazon, and Qlik. LinkedIn forecast a growth slowdown for its field sales hiring solutions business, while blaming European/Asian macro pressures. The company also noted its display ad business continues declining amid weak industry growth.
- Major enterprise software decliners include Splunk (SPLK -23.7%), Workday (WDAY -15.1%), Adobe (ADBE -7%), Zendesk (ZEN -15.2%), ServiceNow (NOW -13.6%), NetSuite (N -12.4%), Salesforce (CRM -11.2%), Paycom (PAYC -10.6%), Ellie Mae (ELLI -11.5%), Cornerstone OnDemand (CSOD -7.8%), Veeva (VEEV -7.7%), Ultimate Software (ULTI -9%), Luxoft (LXFT -7.5%), Manhattan Associates (MANH -8.5%), Box (BOX -6.6%), Guidewire (GWRE -13.6%), Demandware (DWRE -9.3%), Hortonworks (HDP -9.7%), and Tableau rival Qlik (QLIK -16.6%). The casualty list includes many cloud software firms, as well as several analytics software plays. Previously covered: New Relic, Atlassian.
- Major decliners among security tech firms: Palo Alto Networks (PANW -12%), FireEye (FEYE -8.9%), Rapid7 (RPD -8.6%), CyberArk (CYBR -8.3%), Proofpoint (PFPT -8%), Imperva (IMPV -8.3%), Fortinet (FTNT -6.9%), and Vasco (VDSI -5.1%). The selloff comes in spite of an FQ3 beat and in-line FQ4 guidance from Symantec, which has been losing share to various upstarts.
Thu, Jan. 28, 2:53 PM
- Though the Nasdaq is up 0.8%, enterprise cloud software firms Salesforce (CRM -2.7%), Workday (WDAY -3.8%), Demandware (DWRE -4.5%), Veeva (VEEV -3.5%), Cornerstone OnDemand (CSOD -3.3%), Marketo (MKTO -4.4%), Actua (ACTA -2.4%), HubSpot (HUBS -6.2%), and Zendesk (ZEN -2.7%) are lower after cloud IT service management (ITSM) software leader ServiceNow (NOW -16.5%) posted a Q4 billings miss to go with revenue/EPS beats and issued light 2016 sales guidance.
- On ServiceNow's earnings call (transcript), CFO Michael Scarpelli attributed the billings shortfall to a ~$5M forecasting error. Regardless, Mizuho and MKM have responded to the Q4 report by downgrading to Neutral. Mizuho: "We find two [billings] misses in one year concerning." The firm is also worried about a premium valuation, missed quotas by sales reps, and a "large customer's preference to cut payment terms in half."
- MKM is less concerned about the billings miss, and calls Q4 results solid. But the firm is worried about macro pressures, and thinks ServiceNow's track record of major op. margin guidance beats is "unlikely to be sustained given decelerating billings and the current macroeconomic environment."
Wed, Jan. 6, 1:46 PM
- Barclays' Raimo Lenschow has downgraded firewall/security software firm Check Point (CHKP -1.9%), cloud talent management software firm Cornerstone OnDemand (CSOD -2.7%), and data warehousing hardware/software provider Teradata (TDC -3.8%) to Underweight. Cloud HR/financials software vendor Workday (WDAY -3.6%) and e-commerce software/services provider Demandware (DWRE -2.9%) have been cut to Equal Weight.
- Cloud HR software firm Paycom (PAYC -1%), on the other hand, has been upgraded to Overweight on a belief consensus estimates are too low. Meanwhile, BofA/Merrill has launched coverage on Demandware at Buy.
- Regarding Check Point, Lenschow says he prefer security tech firms that are gaining share - his top three ideas are Palo Alto Networks, Imprivata, and Rapid7. He sees security IT spend rising 7% in both 2016 and 2017, a rate on par with 2015's.
- Regarding Cornerstone, Lenschow is worried about slowing top-line growth, a lack of profits, and growing competition. Regarding Workday, he's concerned about competition from SAP/Oracle, a high valuation, and the relatively limited impact of its financials offerings on sales growth.
- The downgraded names are underperforming amid a 1.1% Nasdaq drop.
Nov. 3, 2015, 12:48 PM
Nov. 2, 2015, 5:57 PM
- Demandware (NYSE:DWRE) has used its Q3 report to cut its 2015 subscription revenue guidance to $199M-$201M from $200M-$205M; the e-commerce software/services provider blames "lower than expected volumes among a small group of specialty apparel customers."
- Nonetheless, total revenue guidance has been upped to $233M-$235M from $230M-$235M (consensus is at $233.6M), and net income guidance to $5M-$7M from -$2M to $2M. The revenue hike is attributed to services growth.
- Subscription revenue grew 39% Y/Y in Q3 to $47.8M (83% of total revenue). Live customers rose to 308 from 295 at the end of Q2 and 243 a year ago. Live sites rose to 1,399 from 1,316 at the end of Q2 and 1,027 a year ago. New customers included Calvin Klein, Fruit of the Loom, and iRobot. Existing customers expanding orders included Panasonic, Skullcandy, and Wolverine Worldwide.
- Operating expenses (non-GAAP) rose a healthy 51% Y/Y to $40M. Demandware ended Q3 with $183.4M in cash, and no debt.
- Shares have fallen to $52.00 after hours.
- Demandware's Q3 beat, PR
Nov. 2, 2015, 4:21 PM
- Demandware (NYSE:DWRE): Q3 EPS of $0.07 beats by $0.16.
- Revenue of $57.6M (+50.7% Y/Y) beats by $4.12M.
Nov. 1, 2015, 5:35 PM
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