Put On Your Dance Shoes, It's Time To Tangoe
Small Cap Generalist • 24 Comments
Small Cap Generalist • 24 Comments
Tangoe Doesn't Look Like A Must-Own SaaS Stock
Stephen Simpson, CFA
Stephen Simpson, CFA
Thu, Jun. 23, 3:00 PM
Tue, Mar. 8, 10:16 AM
- Tangoe (TNGO -11.4%) has plunged to new 52-week lows after disclosing yesterday afternoon it's restating all of the 2013-2015 results it has issued and is withdrawing its Q4 guidance. Shares fell as low as $5.32 before bouncing.
- The SaaS telecom management software firm now trades for only 1.2x a 2015 sales consensus of $220.6M.
Mon, Mar. 7, 6:18 PM
- Tangoe (NASDAQ:TNGO) is restating its results for 2013, 2014, and the first three quarters of 2015. The company is also withdrawing its Q4/2015 guidance. Unsurprisingly, Tangoe doesn't expect to file its 2015 annual report (Form 10-K) on March 15, as previously planned.
- Tangoe: "The decision to restate these financial statements is based on the Company’s conclusion that it made errors in recognizing revenue, primarily from business activities that are ancillary to the Company’s core business. A majority of the errors relate to non-recurring revenue ... As a result of these corrections, the Company is revising its revenue recognition policies for several categories of revenue."
- At least $17.1M worth of revenue in the restated periods is expected to be affected (compares with previously-reported total revenue of $565.9M). The op. cash flow impact for the reviewed periods (if there is one) is expected to be minimal.
Dec. 23, 2015, 11:03 AM
- Clearlake Capital discloses it bought 32,630 Tangoe (NASDAQ:TNGO) shares via purchases last Thursday and Friday. Its total stake stands at 3.98M shares (~10%).
- The provider of SaaS telecom expense/asset management software is still down 31% YTD. Shares tumbled in November due to a Q3 miss and soft Q4 guidance.
Nov. 6, 2015, 3:11 PM
- Tangoe (NASDAQ:TNGO) has plunged towards $7 after missing Q3 estimates and guiding for Q4 revenue of $55.5M-$56.8M and EPS of $0.03-$0.04, below a consensus of $61.7M and $0.17.
- The SaaS telecom asset/connection management software firm says it "continued to experience sales execution challenges and remain in a period of product transition" in Q3. It insists it's "in a position to grow market share longer-term due to the roll out of our new and enhanced Matrix platform."
- Recurring product/service revenue rose 9% Y/Y in Q3 to $52.6M; strategic consulting, software license, and other revenue fell 37% to $3.9M. Unlevered free cash flow was $1.5M, down from $5.6M a year earlier.
- Q3 results, PR
Nov. 5, 2015, 5:40 PM
Nov. 5, 2015, 4:29 PM
- Tangoe (NASDAQ:TNGO): Q3 EPS of $0.04 misses by $0.07.
- Revenue of $56.6M (+3.9% Y/Y) misses by $1.91M.
Nov. 4, 2015, 5:35 PM
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Nov. 3, 2015, 11:31 AM
- Constant Contact (NASDAQ:CTCT) is off 0.9%, but from the new price level it established yesterday up 22% after a $1.1B buyout bid from Endurance International Group (EIGI +3.2%). CTCT is at $31.53, down from $31.83, against EIGI's $32/share deal.
- Roth Capital's Richard Baldry sees "little likelihood of a competing bid," and accordingly has downgraded CTCT to Neutral, and reduced his target price to the deal price of $32/share from a previous $38.
- The offer is a "fair control premium, even though it is a valuation well discounted to CTCT’s broader SaaS peer group average of 4.6x," Baldry says.
- "We expect deal to close as-announced ... We believe CTCT’s focus on the SMB space make it unsuitable as an acquisition target for most larger SaaS players, as they tend to focus on the Enterprise space, in our opinion."
- He does think the deal could make other value-oriented names in the space more attractive, holding buy ratings on LivePerson (LPSN +2.3%), Interactive Intelligence (ININ -3.8%) and Tangoe (TNGO +2.3%).
Aug. 7, 2015, 12:44 PM
Aug. 7, 2015, 11:47 AM
- In addition to missing Q2 estimates, Tangoe (NASDAQ:TNGO) is guiding for Q3 revenue of $58M-$59.5M and EPS of $0.10-$0.11 (below a consensus of $65.5M and $0.19), and 2015 revenue of $227M-$231M and EPS of $0.53-$0.58 (below a consensus of $245.3M and $0.75).
- Like many enterprise software firms reporting similar shortfalls, Tangoe blames "sales execution challenges," and says it's taking steps to address the issue. The company named a new sales chief - former IBM software sales exec Michael Pray - in early July.
- CEO Al Subbloie on the earnings call (transcript): "[W]e have had issues related to accurately forecasting when our larger deals will close. And there is still more work to be done with respect to moving our sales organization more towards strategic selling as we begin to roll out the full capabilities of our Matrix platform."
- 30 new customers were added in Q2, at the low end of Tangoe's quarterly target range of 30-40, and several seven-figure deals were pushed out. One of the deals was closed in July, and "active discussions" are said to continue for the others.
- Deutsche and Northland have downgraded to neutral ratings.
- Q2 results, PR
Aug. 6, 2015, 4:20 PM
- Tangoe (NASDAQ:TNGO): Q2 EPS of $0.10 misses by $0.09.
- Revenue of $54.5M (+3.5% Y/Y) misses by $2.33M.
Jul. 17, 2015, 9:40 AM
Jul. 9, 2015, 10:23 AM
- Pandora (P +4.7%), GSV Capital (GSVC +3.1%), Tangoe (TNGO +3.4%), and Envestnet (ENV +4.9%) are outperforming after receiving Outperform ratings from Northland Securities. Price targets are respectively at $20, $13, $18, and $50.
- Northland's Jeff Houston (formerly with Barrington Research) on GSV: "GSV provides investors with access to disruptive, emerging-growth (100% growth on average), privately-held, pre-IPO companies at discounts. The fund typically invests alongside venture capitalists with the best track records, such as Kleiner Perkins, IVP, and Benchmark. At the end of 1Q15, it had positions in 46 private and four public companies and the theme mix was education tech 35%, cloud 29%, social/mobile 22%, marketplaces 9%, and sustainability 6%."
- Houston on Tangoe: ""Tangoe's SaaS and technology-enabled services optimize $29.9 billion of IT spend for more than 1,000 large and midsize organizations. Its flagship offerings address mobile and fixed communications spend and newer products address Cloud (SaaS and infrastructure), IT, and machine-to-machine (M2M) spend ... Clients typically enjoy a 3-10x annual ROI through savings and enhanced productivity." He also provided bullish commentary on the company while at Barrington.
- Pandora's Q2 report arrives on July 23. Shares -14% YTD.
May 8, 2015, 4:35 PM
- Tangoe (NASDAQ:TNGO) sold off today after slightly missing Q1 revenue estimates (while posting in-line EPS) and offering mixed guidance.
- The company has also announced it's buying IBM's Emptoris Rivermine telecom expense management (TEM) software business for an undisclosed sum. Tangoe declares Emptoris has a "global blue chip customer base," and complements its Matrix suite of cloud telecom asset/expense management apps. The deal is expected to close at month's end.
- Q2 guidance is for revenue of $56.5M-$57.5M and EPS of $0.18-$0.19 vs. a consensus of $58.4M and $0.19. Full-year guidance is for revenue of $245M-$250M and EPS of $0.73-$0.78 vs. a consensus of $239.7M and $0.79. Emptoris (naturally isn't factored into estimates) is expected to boost Q2 and full-year revenue by $1M and $10M, and hurt EPS by $0.01 and $0.04.
- Tangoe blames the Q1 sales miss on "quarter-to-quarter variability of non-recurring revenue," while insisting it's "the less strategic component of our business."
- Q1 results, PR
May 7, 2015, 4:08 PM
- Tangoe (NASDAQ:TNGO): Q1 EPS of $0.17 in-line.
- Revenue of $53.5M (+6.2% Y/Y) misses by $1.95M.
Tangoe, Inc. provides communications lifecycle management, software and related services to a range of enterprises, including large and medium-sized businesses and other organizations. communications lifecycle management encompasses the entire lifecycle of an enterprise's communications assets... More
Industry: Business Software & Services
Country: United States
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