Why LogMeIn Shares Got Rejected
Feb 15th 2013 2:55PM
Updated Feb 15th 2013 4:05PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of remote-access software specialist LogMeIn plummeted 28% today after its current-quarter guidance disappointed Wall Street.
So what: LogMeIn's fourth-quarter results managed to top estimates -- EPS of $0.24 on revenue of $37 million versus the consensus of $0.18 and $36.7 million -- but downbeat first-quarter guidance is forcing analysts to recalibrate their growth expectations. Management blamed the miss largely on a higher tax rate, but analysts are more concerned that the revenue slowdown in its Customer Care and RMM segments suggest intensifying competitive pressure.
Now what: Management now sees first-quarter adjusted EPS of $0.09-$0.10 on revenue of $36 million-$36.5 million, well below the consensus of $0.18 and $38.2 million. "We plan to increase our investment in our Access and Collaboration cloud services this year to better capitalize on growing demand in this multi-billion dollar market," CEO Michael Simon said. "And we believe the recent introduction of Cubby -- our latest addition to our Access and Collaboration product group -- gives LogMeIn a compelling and complementary suite of cloud services for today's mobile workplace." But while it might be tempting to bet on the stock for a short-term bounce, LogMeIn's speculative nature continues to make it a questionable long-term opportunity.
Interested in more info on LogMeIn? Add it to your watchlist.
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The article Why LogMeIn Shares Got Rejected originally appeared on Fool.com.Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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