NetSuite, Inc. Earnings: 1 Number You Need to Know

A Fool takes a closer look at NetSuite's earnings and reveals the one metric investors should be paying attention to now.

Feb 11, 2014 at 2:30PM

A sharp and short-term sell-off following NetSuite's (NYSE:N) earnings report was unjustified, Fool contributor Tim Beyers says in the following video. Originally, the stock fell as much as 8% but the tide has turned since the January 30 release and the stock has pulled back to about even. So why the sell-off? Tim points to one number: 29.

NetSuite announced 29% increase in cash flow from operations. Deferred revenue increased at about the same rate, yet both metrics trailed year-over-year gains in revenue, which was up 35%. The company may be having a tougher time finding customers than in previous quarters.

Fortunately, the story doesn't end there. During a conference call with analysts NetSuite Chief Financial Officer Ronald Gill said that the average deal size increased 20% in 2013, and in Q4, "broke records" for large deals with several more than 100K and 500K. Both good signs, Tim says, even if NetSuite still badly peer (NYSE:CRM) in this area. Two years ago, CEO Marc Benioff announced his company's first nine-figure deal, and Salesforce's backlog has been growing ever since.

Is one stock better than the other? Not necessarily, Tim says. After all, it's still early in the cloud computing adoption cycle. There's plenty of time for NetSuite, Salesforce, and their peers to grow and take share away from incumbent suppliers of business software.

Now it's your turn to weigh in. What did you think of NetSuite's earnings report? Please watch the video to get Tim's full take and then leave a comment to let us know whether you would buy, sell, or short NetSuite stock at current prices.

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Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Netflix and at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool recommends NetSuite and It recommends and owns shares of and Netflix. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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