Why Concur’s Shares Crashed

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 Concur Technologies (Nasdaq: CNQR  ) have recovered much of their early morning 11% loss, and have maintained a 5% loss for much of the day. The Street seems somewhat unsure of how to react to Concur's mixed earnings report from last night.

So what: Concur's fiscal fourth-quarter revenue came in at $117.9 million, and the company posted adjusted pre-tax EPS of $0.40. Revenue expectations had been $118.6 million, so Concur missed that target, but its EPS result was well in excess of the $0.25 that Wall Street was looking for. Without one-time items, Concur's adjusted EPS was $0.26, still $0.01 better than the Street's expectations, but hardly a blowout. Full-year results were $439.8 million in revenue, with adjusted pre-tax EPS of $1.39.

Concur offered guidance for the upcoming quarter of $0.30 in adjusted pre-tax EPS. Full-year guidance was "at least" $1.40. That comes in ahead of the consensus estimates of $0.25 for the quarter, and $1.13 for the year.

Now what: Despite these results, Piper Jaffray analyst Mark Murphy downgraded the stock to "sell" status. The wide discrepancy between adjusted results and GAAP results may be one reason why – Concur's GAAP net loss was $0.15 per share in the fourth quarter. The company's operating cash flow for the 2012 fiscal year, at $93.6 million, is good enough to grant the stock a price-to-operating-cash-flow level of 36.2. That's not exactly cheap, and is sure to be lower than the company's final price to free cash flow ratio. Concur may be growing, but it's not fast enough for at least one analyst.

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