Here's Why Constant Contact Shares Skyrocketed Today

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 online marketing software technologist Constant Contact (NASDAQ: CTCT  ) soared 28% today after its preliminary quarterly results topped Wall Street expectations.

So what: Constant Contact shares have slumped in 2014 on concerns over slowing growth, but today's upbeat view -- management now sees 16% full-year revenue growth versus a prior view of 13% -- is quickly easing those worries. Additionally, management expects full-year EBITDA margin to expand 200 basis points, to roughly 18.2%, suggesting that its competitive position and cost structure are improving, as well.

Now what: Management now expects Q1 revenue of $78.7 million-$78.8 million, and a full-year top line of $330 million, versus the consensus of $77.34 million and $323.38 million, respectively. According to CEO Gail Goodman:

In the coming weeks, we will be rolling out significantly enhanced bundles that combine products and capabilities to deliver a more powerful experience for our customers. This is an exciting milestone in our evolution from an email marketing company to a robust marketing platform for small businesses. We expect this will drive higher average revenue per user (ARPU) and improved customer retention rates, while driving a meaningful acceleration of revenue growth in 2014 and beyond.

Of course, with the stock now up about 140% over its 52-week lows, and trading at a 25-ish forward P/E, I'd wait for a wider margin of safety before buying into that growth.

Three stocks poised to skyrocket, forever
The one sure way to get wealthy is to invest in a groundbreaking company that goes on to dominate a multibillion-dollar industry. Our analysts have found multi-bagger stocks time and again. And now they think they've done it again with three stock picks that they believe could generate the same type of phenomenal returns. They've revealed these picks in a new free report that you can download instantly by clicking here now.


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: 2908952, ~/Articles/ArticleHandler.aspx, 9/21/2014 4:38:29 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