Why Constant Contact Shares Got Destroyed
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 Constant Contact (NAS: CTCT) got destroyed today, closing down 30%, after the company reported third quarter earnings.
So what: Revenue totaled $63.8 million, with non-GAAP net income of $6.2 million, or $0.20 per share. Those figures were a little better than expected, but next quarter's guidance was a little light, and next quarter should see earnings per share of $0.14 to $0.16.
Now what: The company said it was having trouble talking trial customers into paying ones in the third quarter, and that new customer additions were below expectations. Trial customer conversion was below historical trends, but Constant Contact says it is implementing various changes in the hopes of improving conversion rates. Following the results, shares saw a slew of analyst downgrades, including Lazard Capital, Credit Suisse, Raymond James, and Needham & Company.
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The article Why Constant Contact Shares Got Destroyed originally appeared on Fool.com.Evan Niu, CFA has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.