Adobe Systems Incorporated (ADBE), Vocus, Inc. (VOCS): Be Careful With This Tech Stock

Page 1 of 2

Adobe Systems Incorporated (NASDAQ:ADBE)The marketing cloud is a hot topic nowadays. Several acquisitions made by big companies have spurred even more interest in it. salesforce.com, inc. (NYSE:CRM) recently bought ExactTarget for $2.5 billion. Adobe Systems Incorporated (NASDAQ:ADBE), which is working hard on its Adobe Marketing Cloud, purchased French marketing automation firm Neolane for $600 million. A recent IPO by another marketing company, Marketo has spurred interest. Marketo just had its first earnings call ever, and it’s time to give it a more in-depth look.

What about growth?

Marketo has never had a profitable quarter, and the second quarter was not an exception. The company finished the quarter with a $0.49 loss per share, missing analysts’ estimates. Revenue was up 62% year-over-year and up 14% sequentially.

The company’s loss totaled $9.6 million on a non-GAAP basis and $12.4 million on a GAAP basis. The difference came from $2.6 million of stock-based compensation. This is a very high number, given the company’s performance. However, this is typical for cloud companies.

Marketo expects to finish the third quarter with $23 million – $24 million in revenue. This would be a sequential growth of 2.2% – 6.7%. Not the type of growth you expect from a company that manages to lose $12.4 million on $22.5 million of revenue.

Is it enough?

The main risk for Marketo is that the company could find itself in no man’s land with no financial performance and no big company bidding for it. In this case, investors would focus on earnings power and dump the stock.

This is the story of Vocus, Inc. (NASDAQ:VOCS), a marketing cloud company. The company recently reported that revenue rose 5% year-over-year and just 1% sequentially. No wonder the stock is down 40% this year. The company is trying to find its place among the competitors.

The recent move was to raise prices and push Vocus, Inc. (NASDAQ:VOCS) into the high end of the market. The average selling price for new customers increased by 45% in the second quarter. The increase in price was offset by the drop in units sold, which resulted in very slow revenue growth.

Marketing cloud is growing healthily at Adobe Systems Incorporated (NASDAQ:ADBE). This segment posted 18% revenue growth and 25% bookings growth last quarter. Adobe Systems Incorporated (NASDAQ:ADBE) has already made its marketing cloud purchase, and it is unlikely it would need more. The company is delivering healthy results, with the growth in both marketing cloud and Creative Cloud. Following Microsoft, Adobe decided to push its products to a subscription model.

In addition, Adobe Systems Incorporated (NASDAQ:ADBE) offers synergy that other companies don’t. An Adobe Systems Incorporated (NASDAQ:ADBE)’s user could develop the marketing product with the help of the Creative Suite, and push it into the market with Marketing Cloud. This is a unique advantage nobody else has.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!