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 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

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

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!