Qumu: Room To Fall As Losses Widen And Revenue Growth Slows
- Recent divestiture at overly depressed valuation of the company’s only source of operating profits and cash generation leaves the ongoing business with significant operating losses.
- “NewCo.” is priced for perfection but will likely print growing operating losses and consume cash per share of over $1 in FY2014. Revenue growth is slowing.
- Market projections for NewCo.’s industry suggest a relatively small and concentrated TAM – NewCo. must now capture outsized market share while growing margins rapidly to achieve meaningful levels of profitability.
- Slowing growth in the form of a weak first quarter coupled with nominal gains in deferred revenue suggests difficult comparisons and softening revenue growth.