Vonage Shares Plunged: What You Need to Know

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.

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At the time thisarticle 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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