Why Concur Technologies, Inc. Shares Tumbled Today

Is Concur's drop meaningful? Or just another movement?

Steve Symington
Steve Symington
Apr 30, 2014 at 4:07PM
Technology and Telecom

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 Concur Technologies, (UNKNOWN:CNQR.DL) dropped more than 10% in Wednesday's early trading after the travel-and-expense management specialist reported better-than-expected quarterly results, but reiterated previous revenue and earnings guidance and reduced the top end of its full-year operating margin outlook.

So what: Adjusted quarterly revenue -- which excludes sales from businesses Concur intends to divest -- rose 31% year over year to $167 million, or higher than analysts' estimates, which called for sales of $165.81 million. This translated to adjusted pre-tax income per diluted share of $0.15, also higher than analysts' models calling for earnings of $0.09 per share.

Finally, despite the beat, Concur reiterated its previous guidance for 2014 non-GAAP revenue to grow approximately 26% over last year, and for 2014 adjusted pre-tax income per share to be "at least $0.93." Concur also revised its guidance for 2014 adjusted operating margin to be in the range of 10% to 12%, compared to the 10% to 14% it told investors to expect three months ago.  

Now what: That hardly means Concur is a broken company, especially considering it added more than 1,000 new customers in the most-recent quarter and experienced strong demand across all its markets. This also explains why shares have already recovered to trade down "just" 4% as of this writing.

In the end, though, I'm still not particularly anxious to dive in today, with shares trading around eight times sales, and 81 times next year's expected earnings. I do think investors would do well to add Concur to their watchlists, though, to keep tabs on its progress toward achieving sustained profitability during the next couple of quarters.