Needham and Stifel have initiated coverage, and both looking at a $22 target price. I read both reports. Lots of "compelling" and "greenfield" and growing market bantered about. Still need proof this team and company can execute in a public environment, especially after CEO reported that many of his key channels (AMZN, GOOG and Ebay) were de-cellerating their growth this quarter. Will be interesting to hear his other insights and their Q2 call in a month.
From my limited understanding, this alleged "deceleration" is not ChannelAdvisor's revenue, it's merely a blip in ecommerce. From the CEO's blog:
"These datapoints show that May was a bit of a slower month than April for e-commerce. As we dig into the Search and eBay specifics you will see some channel specific trends. One thing I've started to notice is that e-commerce appears to be seeing more influence from weather trends that impact traditional retail.
....Historically when we've seen weather related intra-Q blips like this we see a corresponding blip in the month after assuming the weather improves....
Finally, it's important to note that monthly fluctuations are very normal and not necessary a trend (for example, see Feb of this year)."
I hope you're right on the trend. I'm trying to time my entry point on getting into this stock and still leery of buying at this price point. One thing that confuses me, though, on the CEO's earlier reporting observations. Since most of ECOM's revenue is a scrape off of their customers sales through channels(I think a percent or two is the fee they take), and if the CEO says he sees 20% reductions (you only extracted a part of his report) in growth rates for a couple of those channels (like AMZN and Ebay), why wouldn't his observation of Ebay and AMZN declines also impact ECOM's revenue model? Am I missing something? Was he forshadowing lower than expected revs for Q2? A blip is a blip, and can happen, but without more knowledge or understanding, I'll wait until the Q2 earnings call. May he will take some time to explain his observations on the broader Ecommerce market, and how it impacts his model.
I haven't seen anything announced yet on when the call will be Given they are a SaaS model, they should have a pretty good handle at this point on whether they hit their Q or not. I would hope they would announce date of call in the next week or two. I'll check website an see if they have an IR contaact person.