Cvent will release its quarterly report on Monday, marking its first report as a public company after its August IPO. But, even though the stock has soared in its first month or so of trading, investors will still want to see whether Cvent earnings will deliver the potential they see in the stock.
Cvent has focused its attention on adapting event-management and meeting solutions to the cloud-computing revolution. Its products include event-management and strategic meetings software, as well as mobile event apps, ticketing software, and Internet-based surveys to gather feedback both before and after events. Cvent has also developed a network designed to link meeting and event planners to the event venues that will host them, and the hotels that will house participants. Let's take an early look at what's been happening with Cvent over the past quarter, and what we're likely to see in its report.
Stats on Cvent
Analyst EPS Estimate
Previous Quarter EPS
Change From Previous Quarter Revenue
Earnings Beats in Past 4 Quarters
Source: Yahoo! Finance. N/A = not applicable; this is Cvent's first report since going public.
Will Cvent earnings put on a good show this quarter?
Analysts haven't had much time to adjust their views on Cvent earnings since its IPO last month, keeping their initial estimates for the quarter and the full year unchanged. The stock, though, has had a substantial IPO-related bump, rising more than 30% since its first-day close on August 9.
Cvent impressed IPO investors in large part because it has already done a good job of finding a solid business model with demonstrated profit potential. By tapping into the demand from conference promoters, companies seeking to put on corporate meetings, and entertainment-related events, Cvent has realized that the enterprise segment of the cloud-logistics business already involves huge amounts of money. That gives Cvent an advantage over similar companies that have targeted less-promising niches. Active Network , by contrast, has posted losses for eight straight quarters, even though it fulfills much the same function for operators of running, cycling, and triathlon events, and has also tried to push into corporate-event and other business opportunities. Despite substantial gains lately, Active Network's stock remains well below its 2011 IPO price.
One smart move that Cvent made was to build out a proprietary database to link up would-be meeting- and conference-holders with the venues and hotels they need in order to host their events. That gives Cvent two streams of revenue, as event planners pay for the software and services, while Cvent also profits from what the venues and hotels are willing to pay to appear in its database. That business model resembles what real-estate website operators Zillow and Trulia have put together. Both companies seek to profit from bringing in customers to get information about real estate offerings, and both look to industry professionals as a source of revenue as they try to link those professionals to their website visitors. Yet, Zillow's and Trulia's experience might serve as a potential warning to Cvent, as both real-estate sites have posted net losses in recent quarters.
The big wildcard in the industry for Cvent and its peers is the potential for consolidation. Much of Active Network's recent share-price spike has come on speculation that it could get bought out. A similar outcome would be unusual for a newly public company, but if Cvent can keep ramping up its growth and stay profitable, it will eventually look very attractive to a would-be acquirer.
In the Cvent earnings report, take a step back and just look at the quality of the presentation, and the way that corporate management tells its story to analysts and investors. The ability of Cvent's leaders to guide the company forward will be crucial in defining its long-term success.
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The article How Will Cvent Earnings Fare In Its First Report? originally appeared on Fool.com.
Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends The Active Network and Zillow. The Motley Fool owns shares of Zillow. 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.
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