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 ChannelAdvisor Corp. (ECOM) plunged nearly 13% Tuesday despite better-than-expected quarterly results from the cloud-based e-commerce specialist.
So what: Quarterly revenue grew 30% year over year to $19.3 million, which translated to an adjusted net loss of $8.7 million, or $0.36 per share. By comparison, ChannelAdvisor turned in a $0.16 per share net loss in the same year-ago period. Analysts, on average, were looking for a slightly wider $0.37 per share loss on sales of $18.97 million.
In addition, ChannelAdvisor sees second-quarter revenue between $19.8 million and $20.1 million, and full-year 2014 sales between $85 million and $86 million. The midpoint of both ranges is roughly in line with expectations.
Now what: The results were solid, but the market was obviously hoping for more, as analysts at both Baird and Deutsche Bank promptly lowered their respective per-share price targets on ChannelAdvisor to $40 and $32, without changing their "outperform" and "hold" ratings on the stock. It also didn't help that tech stocks in general got hammered today, with the Nasdaq Composite Index plunging almost 1.4%.
However, it's still hard for me to get excited about ChannelAdvisor over the long term while it's still hemorrhaging so much red ink. For now, I personally prefer to simply observe ChannelAdvisor's progress from the sidelines.
