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

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!