Goldman's Greg Dunham has upgraded Demandware (DWRE +5.3%) to Buy, and set a $70 target. "We see current levels (7.7x 2015 EV/Sales versus the group at 6.0x despite 50% higher growth) as an opportunity to buy one of the most differentiated SaaS offerings with strong visibility to 40% plus revenue growth the next three years"
Dunham considers the huge selloff that followed the e-commerce software vendor's Q2 report (caused by soft customer adds) as overdone, and thinks results can beat estimates on the back of improving bookings growth. His 2015 revenue forecast is 6% above consensus.
Demandware (NYSE:DWRE) used its Q2 CC (transcript) to up its full-year revenue guidance by $2.5M to $150M-$151M (above a $148.5M consensus). Q3 revenue guidance of $34.75M-$35.25M is in-line with a $34.9M consensus.
However, the e-commerce software provider also admitted Q2 customer adds weren't as strong as expected, and that a few major deals were pushed out. Demandware ended Q2 with 226 live customers, up by 64 Y/Y but only 11 Q/Q.
Nonetheless, subscription revenue rose 56% Y/Y to $32.5M. Live sites grew 39% to 924.
Separately, Demandware has announced CEO Tom Ebling has been named chairman. He replaces founder Stephan Schambach, who will stay on the board as chairman emeritus.
Demandware (DWRE +10.4%) has soared to new highs after beating Q4 estimates, and issuing strong guidance on its CC (webcast).
The e-commerce infrastructure software/services firm expects Q1 revenue of $28.75M-$29.25M and EPS of -$0.08 to -$0.10, above a consensus of $28.5M and -$0.11. Full-year guidance is for revenue of $143M-$144M and EPS of -$0.05 to -$0.08, largely favorable to a consensus of $138.7M and -$0.08.
Today's gains come even though Demandware has announced CFO Scott Dussault will be leaving to "pursue other career opportunities." Dussault will remain in his current role through June 6 to enable a smooth transition; a search has begun for a replacement.
Demandware's contract backlog (deferred revenue + unbilled subscription commitments) stood at $348.6M at the end of 2013, up 67% Y/Y.
Demandware (DWRE +9.7%) shares climb after the company beat expectations in Q3.
Subscription revenue increased 39% Y/Y to $22.6M as live customers grew 34% to 184. Overage fees were $6M, or 27% of subscription revenue (unchanged from Q3 2012). Services revenue decreased 32% to $1.9M.
ARPU grew to $506K, from $495K in Q2 and $468K in Q3 2012.
Subscription gross margin increased to 81% from 79% in Q3 2012 due to increased leverage.
Shares have pulled back slightly after notching 52-week highs (+14.3% earlier in the day).
Demandware Inc provides software-as-a-service e-commerce solutions that enables companies to easily design, implement and manage their own customized e-commerce sites, including websites, mobile applications and other digital storefronts.