The market's reaction to collaborative commerce solutions provider Click Commerce's
Investors were obviously expecting much stronger numbers. One number that may have concerned investors was accounts receivable (A/R), which jumped 29% on a sequential basis and 147.8% on a year-over-year basis to $15.8 million. Those who listened to the conference call were comforted on learning that the increase was mostly related to the timing of the Xelus acquisition, reaching an artificially high 109 days outstanding before collection. It is expected that this will drop to 92 days (a normal level) on the way to reaching a mid-80s target level.
All that money tied up in A/R certainly didn't help cash generation. Cash flow from operations was a negative $1.1 million this quarter, which, to be fair, also included the costs of the company's recent acquisitions of Xelus, Optum, and ChannelWave.
Investors interested in Click Commerce would do well to focus on its RFID (radio frequency identification) opportunities. Giants such as Wal-Mart
Click Commerce does not provide forward sales or earnings guidance. The one analyst following the company expects earnings of $1.39 a share this year -- pricing this fast-growing enterprise at a less-than-boom-company price of 14.3 times forward earnings.
Over the past 52 weeks, the stock has risen by more than 350%. Some investors may have used today's news to sell and capture their oversized gains. But given the growth opportunity represented by its RFID products, a string of eight consecutive quarters of profitability, and a blue chip list of clients that includes IBM
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