Why SciQuest, Inc. Shares Sank 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 SciQuest, (NASDAQ: SQI  ) plunged 19% Friday after the cloud-based business-automation specialist released in-line first-quarter results, but followed with disappointing forward guidance.

So what: Quarterly adjusted revenue increased 23% year over year, to $26.2 million, which resulted in adjusted net income of $0.09 per diluted share. Both numbers were roughly in line with analysts' expectations.

However, SciQuest also expects current quarter adjusted revenue between $25.2 million and $25.6 million, which should result in adjusted net income per diluted share between $0.06 and $0.07. Analysts, on average, were looking for second-quarter earnings of $0.09 per share on sales of $27.1 million.

Accordingly, SciQuest revised full-year 2014 guidance downward, and now expects adjusted revenue between $103 million and $106 million, and 2014 adjusted earnings between $0.27 and $0.30. Both ranges sit well below expectations for 2014 earnings of $0.42 per share on sales of $112.1 million.

Now what: Regarding the downward revision, SciQuest CEO Stephen Wiehe explained, "While we achieved first quarter financial guidance, we experienced an unexpected lengthening of sales cycles for large enterprise deals." To his credit, however, Wiehe elaborated, "the delays have not been caused by competitive pressures and our fundamental drivers remain strong."

Given SciQuest's weak guidance, it's hard to blame the market for bidding down shares today. But Weihe's comments indicate that shouldn't be a problem for long-term investors. Still, shareholders will want to keep a close eye on guidance going forward to ensure SciQuest's large enterprise deals continue rolling in, even if they're later than expected.

Your credit card may soon be completely worthless
But if SciQuest isn't your bag, don't worry; there are plenty of other great tech stocks poised to take advantage of our changing world. For example, the plastic in your wallet is about to go the way of the typewriter, the VCR, and the eight-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

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: 2941826, ~/Articles/ArticleHandler.aspx, 9/5/2015 12:35:00 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...

Steve Symington

Technology and consumer goods specialist for the Fool. Steve looks for responsible businesses which positively shape our lives. Then, he invests accordingly. Enjoy his work? Connect with him on Twitter & Facebook so you don't miss a thing.

Today's Market

updated 15 hours ago Sponsored by:
DOW 16,102.38 -272.38 -1.66%
S&P 500 1,921.22 -29.91 -1.53%
NASD 4,683.92 -49.58 -1.05%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/4/2015 3:59 PM
SQI $11.00 Down -0.26 -2.31%
SciQuest, Inc. CAPS Rating: No stars