Why Covisint Corp. Shares Plummeted

Is Covisint's plunge meaningful? Or just another movement?

Jan 24, 2014 at 8:01PM

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 Covisint Corp. (NASDAQ:COVS) dropped more than 20% Friday after the company turned in disappointing fiscal third-quarter results.

So what: Quarterly revenue increased 1% year over year to $24.1 million -- a result driven by a 21% increase in subscription revenue to $17.6 million, but offset by a 30% decrease in services revenue to just $6.5 million. That translated to a non-GAAP loss of $0.10 per share, compared to a $0.09 per share loss in the same year-ago period. Meanwhile, analysts were looking for a loss of $0.10 per share on sales of $27 million.

In addition, Covisint projected total revenue growth this fiscal year should be around 10% to 12%, putting it in the range of $99.8 to $101.6 million. By comparison, analysts were modeling fiscal 2014 revenue of $105.09 million.

Now what: The recently IPO'd company has around $55 million in cash remaining on its balance sheet to hold it over for now, but investors are right to be discouraged considering Covisint's growth is coming in below expectations. As a result, and until the company can show more progress toward achieving sustained long-term profitability, I prefer to remain on the sidelines.

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Fool contributor Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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