ChannelAdvisor (ECOM) Stock Dives on Revenue Miss

Shares of ChannelAdvisor Corp. (ECOM) were off -8.00 or -37.83 percent to $13.15 per share in this morning's premarket, after the company warned shareholders yesterday that the company would not meet its revenue guidance for the fourth quarter. ChannelAdvisor stock closed at $21.15 per share, off -0.60 or -2.76 percent in Monday's regular trading session.

Morrisville, North Carolina based ChannelAdvisor Corp. was founded in 2001 by Scott Wingo and Aris Buinevicius and is best known for publishing e-commerce sales information.
ChannelAdvisor publishes monthly Same Store Sales reports comparing results from (AMZN) and eBay (EBAY). The company also offers cloud based software for e-commerce customers.

ChannelAdvisor services its retail customers connecting them to large e-commerce websites such as and eBay, as well as to online marketing channels like Google (GOOG), Pinterest and Facebook (FB). The company went public in May of 2014, selling 5.8 million shares at $14 per share. At the end of 2012, the company had over 1,900 customers globally, which processed in excess of $3.5 billion in merchandise through their platform.

ChannelAdvisor had originally forecast revenue to come in at $25.6 million to $26.1 million for its fourth quarter of 2014, which ended on December 31st. In a statement released yesterday, the company is now expecting $23.7 million based on preliminary estimates.

Scot Wingo, CEO of ChannelAdvisor said in the statement that, "We are disappointed that the fourth quarter did not meet our guidance. We saw an unusual shift of gross merchandise volume (GMV) to larger customers this holiday season at the expense of smaller customers. Because larger customers enjoy volume discounts in the form of lower take rates, this shift translated to lower variable subscription revenue, even though overall GMV increased 31% year over year for the fourth quarter .

Wingo continued explaining, "This resulted in fixed subscription revenue for the fourth quarter growing approximately 27% while variable subscription revenue decreased approximately 5% compared to a year ago. Despite this, we believe our fundamental value proposition, position in the market, and opportunities for continued growth remain intact. As fixed subscriptions grow as a percentage of overall revenue, we expect our overall visibility to improve as we look to continued growth in 2015. I want to emphasize that these financial results are preliminary and subject to change based on the completion of our normal quarter-end review process. We will provide additional financial details and customary metrics on our quarterly earnings call scheduled for February 5.

Despite CEO Wingo's reassurances to investors, this morning's action has taken the stock below its initial public offering price of $14 per share. The stock is also significantly lower than its 52 week high of $49.90 and looks like it might possibly test its yearly low of $11.83 which it made last November. Today's action could confirm a downward trend in the stock if the stock doesn't recover some of its aftermarket and premarket losses.

Other News About ECOM
ChannelAdvisor Corporation to Present at the Needham Growth Conference
Conference will be held today at 1:30 PM in New York City.
ChannelAdvisor Promotes Josh Christie to Vice President of Engineering
Christie will lead an engineering team to improve ChannelAdvisor's SaaS platform.

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Published on Jan 13, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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