A Fool Looks Back

Sometimes even a race car has to slow down.

Zipcar (Nasdaq: ZIP  ) stumbled in its latest quarter. The leading car-sharing service missed Wall Street's top- and bottom-line targets for the second quarter. Guidance for the new quarter is also short of where the prognosticators were perched.

Sharing of big-ticket assets is a trend that isn't going to go away. The high costs of auto ownership make Zipcar and other auto-sharing services smart decisions for infrequent drivers. However, Zipcar needs to work on its engagement.

Subscriber growth is 21% higher than it was a year ago, but revenue climbed only 15%. In other words, the average user for Zipcar's 731,000 subscribers is sending less money to Zipcar.

A great model isn't always a great business.

Briefly in the news
And now let's take a quick look at some of the other stories that shaped our week.

  • Jamba (Nasdaq: JMBA  ) has nearly doubled this year, but it took a step back after posting a smaller adjusted quarterly profit than the market was expecting this week. Blend harder next time.
  • Sirius XM Radio (Nasdaq: SIRI  ) continues to beef up its content with artist-centric programming. Linkin Park and Latin music sensation Juanes are two popular musical acts that have been added to the satellite-radio provider's exclusive content.
  • LivePerson (Nasdaq: LPSN  ) posted a quarterly profit that fell woefully short of Wall Street expectations. Revenue growth was still a robust 21%, but LivePerson may want to strike up a live chat the next time it's online to see whether it can get some advice on improving its margins.

Moving on
Now that you've had a glimpse of the past, let's delve into the future. We're now just months away from the 2012 presidential election. Do you know the stocks that could skyrocket after the polls close? A new special report has all of the winners. It's free, so what are you waiting for? Check it out now.

The Motley Fool owns shares of Zipcar. Motley Fool newsletter services have recommended buying shares of LivePerson and Zipcar. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He owns shares of Jamba and Zipcar and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Motley Fool has a disclosure policy.


Read/Post Comments (4) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 04, 2012, at 9:21 AM, Pelermon wrote:

    haha foolish to think music is the future of SIRI. They own the "sovereign" sky,

    Unbounded signals carrying video, internet, cell ? boom baby.

  • Report this Comment On August 05, 2012, at 9:35 AM, doubting wrote:

    Rick,

    As you know, sirius is reporting Q2 results this Tuesday. Analysts are coming out with projections of revenue at $834M and eps at 2 cents. I believe that they are lowballing siri's results.

    On July 9 Mel released two Q2 numbers, namely, revenue upgraded to $3.4B (very exciting news) and 622K news subs for the quarter that is even more exciting.

    It appears that analysts are ignoring Mel's revenue update. Here is the math. In Q1, 2012 siri netted $805M in revenue. If we believe analysts' projection of $834M in Q2, this means that in Qs 3 and 4 siri will have to average $880.5M ($1,761B for both Qs).

    Based on the above, we can safely conclude two things. First, siri will beat Q2 revenue by up to $10M and msot likely will prduce 3 cents a share based on 700M fcf projection by the company (so far it was only $25M in Q1 and siri has to average $225M per Qs 2, 3 and 4) and second, analysts continue their adversarial campaign against the company.

  • Report this Comment On August 06, 2012, at 10:20 AM, mrbkush wrote:

    I think you are confusing an attractive concept or appealing idea with a good business model.

  • Report this Comment On August 08, 2012, at 6:04 PM, mkrusi wrote:

    I am concerned with Jamba's profits. They have been discounting heavily. They currently have a $1 Smoothie promotion which is below their cost of goods sold. Last week they extended their BOGO sale which was selling smoothies at cost.

    McDonalds and BK have made inroads into the smoothie business similar to what Walmart has don't to SuperValue, Safeway and other grocery stores. Jamba will have a strugle in selling $5 Smoothies, so I am selling short.

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