Speed Commerce's Slow Start To 2015 Shouldn't Continue
- Speed Commerce has been transitioning from a distribution company to an ecommerce company. From fiscal 2011-2014, ecommerce revenue has grown at a CAGR of 259%.
- Although in Q1 2015, revenue growth has drastically slowed. Ecommerce revenue only grew 0.2% y/y. Although expected, revenue was impacted by the departure of several customers.
- Despite a slow start to fiscal 2015, the company's future revenue growth prospects are bright. Revenue growth should accelerate due to a strong sales pipeline, sales team, and organic growth.
- The company's stock is fairly valued based on its current growth rate. However, revenue growth should accelerate which should increase investors' willingness to pay a premium.
- As the company fully transitions, the ecommerce business should become significantly more profitability. Due to the reasons above, Speed Commerce's stock is a very good value.