About a year ago, the stock price of Art Technology Group
In Q2 earnings released on Tuesday, revenues increased 25% to $25.2 million. Net income, including $906,000 in expenses for stock options, was $2.3 million, or $0.02 per diluted share, compared with a net loss of $300,000, or zero per diluted share in the same period a year ago. The company's cash position increased by $3.8 million to $37.4 million.
Art Technology develops a fully featured software platform that allows companies to manage e-commerce, marketing, and customer service through a variety of customer touch points, such as the Web, email, call centers, and mobile devices. One of its more notable ongoing product innovations is something called "searchandising," which allows an online user to select a variety of a product's attributes, such as brand, style, color, and size, rather than perform a traditional search for the product itself. The site will then search a company catalog and find that specific product.
Another neat feature is live chat, in which a customer-service person can answer consumers' questions online in real time. This feature tends to increase conversion rates as well as reduce returns. It may also help with up-sell and cross-sell opportunities.
On the conference call, Art Technology's management reaffirmed the company's full-year guidance, including revenues of $97 million to $105 million and net income of $11 million, or $0.07 per share to $0.08 per share.
However, keep in mind that the company focuses on large customers, including Best Buy
Given the move of more and more companies to the Net, the long term looks positive for Art Technology. But if we suffer an economic slowdown, big-ticket software items are easy to cancel or delay. Tread carefully -- there's still a lot of risk in this stock price.
Fool contributor Tom Taulli does not own shares of companies mentioned in this article.