In response to mixed second-quarter earnings and sharing downbeat guidance, shares of Care.com (NYSE:CRCM), a leading online platform for managing family care, dropped 22% as of 1:08 p.m. EDT on Tuesday.
Here are the headline numbers from the quarter:
- Revenue grew 11% to $51 million. That was a little short of Wall Street's estimate of $52.2 million.
- Total members grew 15% to $34.1 million; total families grew 17% to 19.8 million.
- Net loss was $64.8 million, which is mostly attributable to a valuation allowance from certain net operating loses and deferred tax assets.
- Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was flat at $5.9 million.
- The loss per share reported under generally accepted accounting principles (GAAP) was $2.01.
- The non-GAAP earnings per share (EPS) figure was $0.09, which was $0.01 better than analysts had expected.
Here's the guidance that is being shared with investors:
- Third-quarter 2019 revenue is expected to land between $52 million and $52.5 million. That's well below the $56.2 million that Wall Street was looking for.
- Third-quarter 2019 non-GAAP EPS is expected to be about $0.10. That's also shy of the $0.12 consensus estimate.
- Full-year 2019 revenue is expected to come in between $206.5 million and $208 million. By contrast, market-watchers were expecting $218.7 million.
- Full-year 2019 non-GAAP EPS is expected to be between $0.49 and $0.52. That's also below the $0.56 that Wall Street was looking for.
If the mixed quarterly results and downbeat guidance weren't bad enough, Care.com also announced that its founder and CEO Sheila Marcelo is transitioning to the role of executive chairwoman as soon as a new CEO can be found.
Add it all up, and it's no surprise to see shares getting whacked today.
There aren't a lot of positive takeaways for investors in this earnings report. However, it is possible that a leadership change could help to get this business back on track.
Shares are currently trading for less than 12 times next year's earnings estimates, which is a dirt cheap price for a profitable online marketplace. Following today's big sell-off, Care.com might be an interesting stock for value investors to dig into.