It has been about a month since the last earnings report for LogMein . Shares have lost about 0.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is LogMein due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
LogMeIn Q1 Earnings Miss, Revenues Beat Estimates
LogMeIn recently released mixed results for first-quarter 2020, wherein the top line surpassed the Zacks Consensus Estimate, while the bottom line missed the same. Non-GAAP revenues of $322.4 million marginally beat the Zacks Consensus Estimate of $322 million and increased 5% year over year.
Non-GAAP earnings of $1.21 per share increased 3.4% year over year. However, the reported figure missed the consensus mark by a penny.
LogMeIn did not hold a conference discussing the recently-released first-quarter 2020 results or issue any guidance due to its impending acquisition agreement. Notably, in December 2019, the company entered into a definitive agreement to be acquired by technology-focused global private equity firms Francisco Partners and Evergreen Coast Capital Corp. The transaction is expected to be completed by mid-2020.
Q1 Details
Unified Communication and Collaboration (UCC) business revenues increased 2% year over year to $174 million.
Identity and Access Management revenues rose 12% from the year-ago quarter to $105 million.
Customer Engagement and Support business revenues declined 1% on a year-over-year basis to $43 million.
The company’s gross renewal rate across all products was nearly 80%.
International revenues constituted 22% of total revenues during the first quarter.
Margins
In the first quarter, the company’s non-GAAP operating income edged down 1.1% year over year to $79.6 million. Also, the operating margin contracted 170 basis points (bps) to 24.7%.
Adjusted EBITDA of $96.1 million was marginally down from the year-ago quarter’s level of $96.8 million. Additionally, the adjusted EBITDA margin shrunk 160 bps to 29.8%.
Balance Sheet and Other Financial Details
LogMeIn ended the March-end quarter with cash and cash equivalents of $189.6 million compared with $128 million at the end of fourth-quarter 2019.
The company generated $88 million of adjusted cash flow from operational activities and $88.1 million of adjusted free cash flow in the reported quarter.
How Have Estimates Been Moving Since Then?
Estimates review followed an upward path over the past two months.
VGM Scores
Currently, LogMein has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
LogMein has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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LogMein (LOGM) Down 0.8% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for LogMein . Shares have lost about 0.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is LogMein due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
LogMeIn Q1 Earnings Miss, Revenues Beat Estimates
LogMeIn recently released mixed results for first-quarter 2020, wherein the top line surpassed the Zacks Consensus Estimate, while the bottom line missed the same. Non-GAAP revenues of $322.4 million marginally beat the Zacks Consensus Estimate of $322 million and increased 5% year over year.
Non-GAAP earnings of $1.21 per share increased 3.4% year over year. However, the reported figure missed the consensus mark by a penny.
LogMeIn did not hold a conference discussing the recently-released first-quarter 2020 results or issue any guidance due to its impending acquisition agreement. Notably, in December 2019, the company entered into a definitive agreement to be acquired by technology-focused global private equity firms Francisco Partners and Evergreen Coast Capital Corp. The transaction is expected to be completed by mid-2020.
Q1 Details
Unified Communication and Collaboration (UCC) business revenues increased 2% year over year to $174 million.
Identity and Access Management revenues rose 12% from the year-ago quarter to $105 million.
Customer Engagement and Support business revenues declined 1% on a year-over-year basis to $43 million.
The company’s gross renewal rate across all products was nearly 80%.
International revenues constituted 22% of total revenues during the first quarter.
Margins
In the first quarter, the company’s non-GAAP operating income edged down 1.1% year over year to $79.6 million. Also, the operating margin contracted 170 basis points (bps) to 24.7%.
Adjusted EBITDA of $96.1 million was marginally down from the year-ago quarter’s level of $96.8 million. Additionally, the adjusted EBITDA margin shrunk 160 bps to 29.8%.
Balance Sheet and Other Financial Details
LogMeIn ended the March-end quarter with cash and cash equivalents of $189.6 million compared with $128 million at the end of fourth-quarter 2019.
The company generated $88 million of adjusted cash flow from operational activities and $88.1 million of adjusted free cash flow in the reported quarter.
How Have Estimates Been Moving Since Then?
Estimates review followed an upward path over the past two months.
VGM Scores
Currently, LogMein has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
LogMein has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.