Vonage Shares Plunged: What You Need to Know

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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 Voice-over-Internet-Protocol specialist Vonage (NYS: VG) are getting hung up on today, with the stock plunging by 16% at the low, after the company reported earnings this morning.

So what: Third-quarter revenue came in at $216.5 million, which was mostly flat sequentially and year over year, while earnings per share were $0.11. When compared to the consensus estimates, the story was mixed as sales fell short but the bottom line registered a beat.

Now what: Soft guidance is causing the stock's drop today, although there were no changes to prior forecasts that expect EBITDA of at least $165 million. Average monthly revenue per line ticked up to $30.16, but monthly churn also rose to 2.7%. Additionally, the company expects full-year churn in that same ballpark of 2.6%, which is on the high end of its forecasts and is spooking investors.

Interested in more info on Vonage? Add it to your watchlist byclicking here.

At the time this article was published Fool contributorEvan Niuholds no position in any company mentioned.Click hereto see his holdings and a short bio. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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