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.
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. 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
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
Apr. 14, 2015, 12:24 PM
- "We like Tangoe’s dominant share of a large market, barriers to entry, blue-chip clients, new products, potential for further client penetration, 10-15% growth with improving profitability," writes Barrington Research's Jeff Houston, launching coverage on Tangoe (NASDAQ:TNGO) with an Outperform rating and $18 target.
- Houston forecasts 2015 revenue of $239M (+13%) and 2016 revenue of $266M (+11%), slightly below consensus estimates of $239.7M and $268.4M. At the same time, he notes management "aims to reach $1 billion of [annual] revenue over time with 100-200 basis points of annual margin improvement."
- The cloud telecom management software vendor is near its highest levels since last November.
Apr. 10, 2015, 3:05 PM
- Today's notable tech gainers include IP licensing firm VirnetX (VHC +6%), custom parts maker Proto Labs (PRLB +4.6%), printing plate/commercial film maker Eastman Kodak (KODK +3.9%), cloud HR software vendor Paylocity (PCTY +3.7%), cloud telecom expense software vendor Tangoe (TNGO +4.2%), and cloud tech support software vendor Support.com (SPRT +6.7%). The Nasdaq is up 0.4%.
- Only a few tech companies are posting major declines. The group includes Chinese online video platform Youku (YOKU -5.7%) and mainframe/high-end server maker Unisys (UIS -3.4%).
- Following a rough 2014, VirnetX is up 34% in 2015; 15.9M shares were shorted as of March 13. Proto Labs has broken out of the narrow range shares have traded in since mid-February. Support.com's gains come a day after the company disclosed a new contract with Comcast. Paylocity is erasing the losses seen yesterday following a BofA downgrade. Kodak is up 13% since posting Q4 results on March 16.
- Youku, quite volatile lately, is giving back a chunk of Wednesday's big gains. Unisys' decline comes ahead of its April 23 Q1 report. On Wednesday, the company announced it's supplying high-end servers and cybersecurity software to NASA through the agency's SEWP V contract (covers multiple suppliers, worth up to $20B over 10 years).
- Previously covered: 3D Systems, Alcatel-Lucent, Nokia, LinkedIn, GoDaddy, FireEye, Turtle Beach, Mavenir/Mitel, Gigamon, Synacor
Mar. 12, 2015, 3:13 PM
- Major tech gainers are about even with major decliners on a day the Nasdaq is up 0.8% (thanks to a broader market rally) in spite of Intel's Q1 warning.
- Notable gainers include 3D printer maker Voxeljet (VJET +5.9%), cloud ERP/HR software provider NetSuite (N +3.7%), flash sales site Zulily (ZU +7.5%), stock photo marketplace Shutterstock (SSTK +6.5%), cloud telecom expense software vendor Tangoe (TNGO +5.6%), It services provider Virtusa (VRTU +4.7%), online video ad platform TubeMogul (TUBE +4%), and online ad campaign software provider Marin (MRIN +4.2%).
- Notable decliners include several Chinese firms. Specifically, search/portal/game provider Sohu (SOHU -5.3%), entertainment/IM/gaming platform YY (YY -4.2%), mobile game publisher Sky-mobi (MOBI -5.8%), and sports lottery site 500.com (WBAI -5.6%).
- Other big decliners include printer maker Lexmark (LXK -2.6%), chip packaging/testing provider ChipMOS (IMOS -4.7%), and smart grid/wind turbine component maker AMSC (AMSC -6.3%).
- Zulily is just a day removed from making fresh lows the wake of last month's Q4 miss and soft guidance. BMO provided an upbeat note on TubeMogul yesterday.
- YY has now more than given back the gains it saw last week following its Q4 beat. ChipMOS posts Q4 results after the close, and is two days removed from reporting its February sales rose 10.5% Y/Y, a slower pace than in recent months (thanks in part to the timing of the Chinese New Year). 500.com recently crashed due to license suspensions, but had bounced from its lows. Lexmark drop comes shortly after HP refreshed its printer lineup.
- Previously covered: Box, Rosetta Stone, CyberArk, Integrated Silicon, Universal Display, Spherix, Synchronoss, Ingram Micro
Sep. 4, 2014, 10:34 AM
- Barclays has downgraded Tangoe (TNGO -4%) to Equal Weight, and cut its target by $7 to $15.
- The cloud telecom management software provider is now down 24% YTD.
May 30, 2014, 1:49 PM
- High-beta enterprise tech names are particularly well-represented in a momentum stock selloff as Splunk, Nimble Storage, Violin Memory, and (especially) Infoblox fall post-earnings.
- Analytics/data visualization software vendors Tableau (DATA -6.5%) and Qlik (QLIK -4.1%), often hyped (like Splunk) as big data plays, are among the decliners. As is flash storage vendor Fusion-io (FIO -5.4%), which competes with Violin and (to a lesser extent) Nimble. But they're far from the only ones.
- Security decliners: FEYE -6.5%. CUDA -8.4%. IMPV -7.4%. PFPT -5.7%. VDSI -4%. QLYS -4.5%.
- Cloud software decliners: WDAY -4.1%. JIVE -4.3%. MKTO -7.4%. NOW -4.9%. TNGO -5.1%. CSLT -6.9%. TXTR -6.7%. RALY -11.6%.
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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