ENVI shares fell off a cliff yesterday as they pre announced 2nd qtr results down from estimated $18m to $11m due to slow down and delays caused by the recession. Before yesterday they were around $5.5-$6 and today can be bought for $2.50. Envivio IPO'd about 6 months ago with a share price of around $8. They have drifted slowly down with the Tech market until yesterdays shock announcement, which I guess has caused shareholders to think "what have I got myself into". Does this represent an buy opportunity, are they oversold?.
I believe this is a real opportunity. Envivio makes technology (software) that allows video to be delivered seamlessly over a wide range of devices from mobile phones through PC's through TV. Its a technology of today. I looked at their last analyst presentation and they are a company growing fast and doing well with customers all over the globe, big customers with real delivery problems. They have a CAGR of over 70% (until yesterday) and cash in the bank of around $2 a share ($75m). According to their CEO nothing has changed in terms of market growth and penetration, just customers slowing down orders and delaying deliveries. I will be adding them to the fund to replace Thompson travel I think, certainly I will invest myself. The CEO speaks below:-
"Our preliminary revenue results reflect a general slowdown in spending by our service provider customers, in particular in North America and Western Europe, which have been two key growth areas of the Company in the last two years,” said Julien Signès, president and CEO, Envivio. “During the second quarter, we did not see any changes to our competitive positioning, and our win/loss ratio in the multi-screen market remains consistent with prior experience. Despite this, we experienced a slowdown of major project implementations and a lengthening of sales cycles, which we attribute to the current global economic environment. We are disappointed in these results and are conducting a full review of our operations.
I believe this is a real opportunity. Envivio makes technology (software) that allows video to be delivered seamlessly over a wide range of devices from mobile phones through PC's through TV. Its a technology of today. I looked at their last analyst presentation and they are a company growing fast and doing well with customers all over the globe, big customers with real delivery problems. They have a CAGR of over 70% (until yesterday) and cash in the bank of around $2 a share ($75m). According to their CEO nothing has changed in terms of market growth and penetration, just customers slowing down orders and delaying deliveries. I will be adding them to the fund to replace Thompson travel I think, certainly I will invest myself. The CEO speaks below:-
"Our preliminary revenue results reflect a general slowdown in spending by our service provider customers, in particular in North America and Western Europe, which have been two key growth areas of the Company in the last two years,” said Julien Signès, president and CEO, Envivio. “During the second quarter, we did not see any changes to our competitive positioning, and our win/loss ratio in the multi-screen market remains consistent with prior experience. Despite this, we experienced a slowdown of major project implementations and a lengthening of sales cycles, which we attribute to the current global economic environment. We are disappointed in these results and are conducting a full review of our operations.
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