Why Tangoe Shares Tanked

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: After an early slide that shaved nearly 10% off its value, Tangoe (NASDAQ: TNGO  ) has regained some ground and now sits at a 6% loss. The company's shares fell following mixed guidance, but on balance it seems to not have been worth the morning drop.

So what: For the completed fourth quarter, Tangoe reported $44 million in revenue and adjusted earnings of $0.17 per share. This was a double beat, as Wall Street sought $42.5 million on the top line and $0.16 in EPS. However, Tangoe's guidance for both the first quarter and the full year appears a bit underwhelming. For the in-progress quarter, Tangoe expects between $43.8 million and $44.3 million in revenue and $0.14 in EPS against the consensus of $44.3 million in revenue and $0.14 in EPS. For the full year, Tangoe's guidance is slightly better, as the company expects $188.5 million to $191.5 million in revenue and between $0.67 and $0.70 in EPS, which compares to Wall Street's consensus of $191 million in revenue and $0.64 in EPS.

Now what: Full-year guidance represents, at the high end, a 40% increase from 2012's adjusted EPS of $0.50, which isn't too shabby, and would provide an adjusted P/E around 22, based on the company's current share price. Tangoe's trailing-12-month free cash flow has also been on a strong upwards trajectory before this report, which indicates a healthier company than its GAAP losses might suggest. The market doesn't seem to know how to handle Tangoe's guidance, which might be a buying opportunity. It could be worth the effort to dig deeper into this company's key data points.

Want more news and updates? Add Tangoe to your watchlist now.

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  • Report this Comment On February 18, 2013, at 8:49 PM, iheartdrop55 wrote:

    Actually, no. Tangoes Shares dropped because a couple of firms had shown evidence of securities fraud. That's why Tangoes shares dropped. They've been under investigation by a few firms for securities fraud (see StreetSweeper and Copperfield Research Reports) and their executives have been accused of the same type of fraud in the past (see IMA lawsuit). The reports show that basically they use investor money to fuel M&A and then use that acquired revenue to falsify their organic growth numbers. I'm a former employee of Tangoe and I believe these reports to be true. I'm one of the original developers of the billingIT platform which was an open-source based high volume distributed TEM platform which Tangoe acquired. Their Ponzi scheme seems to be much the same type of Ponzi scheme Madoff used, ironically, I'm also a former

    employee of Bernard L. Madoff, LLC. In any event, Tangoe is nothing more then a shell of a management company in my opinion.

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9/28/2016 4:00 PM
TNGO $8.38 Up +0.03 +0.36%
Tangoe CAPS Rating: *