Why Bazaarvoice, Inc. Shares Bounced Today

What: Shares of Bazaarvoice, (NASDAQ: BV  ) jumped 17% Wednesday after the company provided an update on a potential divestiture of its PowerReviews business, and turned in better-than expected fiscal third-quarter 2014 results.

So what: Quarterly revenue increased 12% year over year, to $48 million, which translated to a $0.02 per share improvement in Bazaarvoice's adjusted net loss to $0.04 per share. Analysts, on average, were looking for a net loss of $0.06 per share on sales of $46.57 million.

For the current quarter, Bazaarvoice expects revenue to be in the range of $44.9 milion to $45.9 million, with an adjusted loss per share in the range of $0.10 to $0.12. Curiously enough, analysts were expecting a fiscal fourth-quarter loss of $0.09 per share on sales of $46.3 million.

However, thanks to the strong third-quarter performance of the company's media segment, management also increased the midpoint of its full-year fiscal 2014 guidance by $1 million, to $183 million, That should result in a 2014 loss per share in the range of $0.25 and $0.27. Both figures are in line with analysts' expectations.

Now what: Management also provided an update on the previously announced U.S. court decision, which ruled that Bazaarvoice had violated U.S. antitrust law with its 2012 acquisition of rival PowerReviews.

Specifically, they reminded shareholders that the U.S. Department of Justice had filed a proposed motion for judgment on Feb. 12, calling for, among other things, the divestiture of the PowerReviews business. Bazaarvoice representatives filed their opposition to the DOJ's brief yesterday, and are currently awaiting the DOJ's reply due March 12, and a remedy hearing scheduled for April 2.

However, while Bazaarvoice would obviously prefer to hang on to PowerReviews, CEO Eugene Austin stated, "In light of the potential outcomes discussed in the briefs, we have been in discussions with potential divestiture buyers of PowerReviews and have received significant interest from multiple parties."

While I'm not personally compelled to dive into Bazaarvoice stock given its lack of profitability and sluggish top-line growth, I have to applaud management for its prudence in accounting for both possible situations. In the end, I think investors are right in bidding up shares today.

Consider the explosive small-cap stock in this free report
If Bazaarvoice doesn't quite whet your appetite for growth, you're in luck! Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play," and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.


Read/Post Comments (0) | Recommend This Article (0)

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.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2865223, ~/Articles/ArticleHandler.aspx, 10/24/2014 5:51:47 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement