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Why Care.com, Inc. Shares Sank Today

By Steve Symington – Feb 26, 2014 at 7:46PM

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Is Care.com's drop meaningful? Or just another movement?

What: Shares of Care.com (CRCM) fell nearly 15% Wednesday after the company turned in disappointing fourth-quarter results.

So what: Though quarterly revenue grew 41% year over year to $22.5 million, Care.com's fourth-quarter loss widened from $2.5 million in the same year-ago period to $3.6 million, or $1.16 per share. Analyst estimates aren't available for the company, which only held its initial public offering last month.

For the full year 2013, Care.com's revenue grew 68% to $81.5 million, which translated to a whopping GAAP loss of $9.45 per share.

For the current quarter, Care.com projects revenue of $23.8 million to $24.8 million, with a loss per share in the range of $0.58 to $0.54. For the full year 2014, it expects revenue of $108 million to $111 million, with a loss per share in the range of $1.16 to $1.06.

Now what: Care.com's full-year guidance indicates the company is headed in the right direction by narrowing its losses, but its slowing top-line growth at this point represents a valid concern for investors wondering when the red ink will actually end. At this point, that's why remain perfectly happy watching this one from the sidelines. 

Steve Symington has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Amazon.com. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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