NEW YORK (TheStreet) -- E2open (EOPN) shares are down 28.6% to $11.07 on Thursday after the cloud based software solutions provider adjusted its full year revenue guidance while providing preliminary second quarter results.
The company expects full year revenue to be between $83 million and $85.5 million, down from previous guidance of $89 million to $91.5 million, and short of analysts expectations of $89.6 million in revenue.
E2open also expects a second quarter net loss between 13 cents and 12 cents, narrower than the 20 cents to 18 cents they originally forecast. Analysts are expecting a loss of 19 cents per share.
Analysts at Northland Capital and Needham downgraded their rating to "market perform" and "hold" from "outperform" and "buy", respectively.
Analysts at Canaccord Genuity (CCORF) kept their "buy" rating on the stock but lowered its price target to $16 from $22.
E2open will release its second quarter earnings results on October 8.
TheStreet Ratings team rates E2OPEN INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate E2OPEN INC (EOPN) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 35.7% when compared to the same quarter one year ago, falling from -$5.39 million to -$7.32 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market, E2OPEN INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Looking at the price performance of EOPN's shares over the past 12 months, there is not much good news to report: the stock is down 32.47%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- E2OPEN INC's earnings per share declined by 19.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, E2OPEN INC reported poor results of -$0.95 versus -$0.03 in the prior year. This year, the market expects an improvement in earnings (-$0.54 versus -$0.95).
- The gross profit margin for E2OPEN INC is rather high; currently it is at 66.37%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -38.45% is in-line with the industry average.
- You can view the full analysis from the report here: EOPN Ratings Report
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE.