Robert DeFrancesco’s Tech-Stock Prospector January 11, 2014 Cloud Winner: NetSuite Continues to Disrupt; Shares +53% in 2013 After rising 65% in 2012, shares of cloud-based ERP software provider NetSuite (N, $105.21) last year gained 53%. In October, the stock hit a new all-time high at $114. One of our 8 TSP Tech Disruptors for 2013 (it made it onto our list of 7 Disruptors for 2014 as well), NetSuite reported Q3 revenue and billings growth of 34% and 35%, respectively. More impressive, deferred revenue advanced 40% to $189.6 million. In Q3, NetSuite added more than 320 customers across various verticals. Deal sizes continued to increase, with the ASP up in excess of 20% year over year. The company in the September quarter closed a record number of deals worth more than $250,000 each. Sales of the flagship OneWorld offering accounted for 40%+ of new business and the number of these deals hit a record level. NetSuite closed one multi-year deal that was just shy of eight figures, while two other deals each had recurring revenue of more than $1 million annually. NetSuite’s latest 2013 guidance (as of the Q3 report): revenue of $410 million to $411 million, up from previous guidance of $406 million to $410 million and above the consensus estimate at the time of $409.1 million. The company also offered its first look at 2014: revenue of $525 million to $535 million, representing ~28.9% growth at the midpoint. Given that NetSuite continues to snag serious market share from legacy ERP vendors, this outlook could prove to be conservative The 2014 consensus revenue estimate of $532.4 million, toward the high end of the guidance range, indicates growth of 29.6%. The high estimate on Wall Street is all the way up at $547.2 million. ------------------------------------------------------------------------------------------------------------ Download the January 2014 issue of Tech-Stock Prospector to your Amazon Kindle or Kindle for iPad/iPhone reading app here: http://www.amzn.com/B004T6Z0ME Here are some of the topics covered in the January 2014 issue: *Top potential takeover targets in tech for 2014 *An update on the continued land grab in marketing automation *How FireEye could spur more cybersecurity M&A *Might Cisco Systems make a sizable acquisition to help jumpstart growth? *A small-cap name that’s big in enterprise vulnerability management *Proofpoint builds its targeted attack prevention business *New growth drivers for ServiceNow in cloud-based IT management *Digital-advertising play: Marin Software *Cornerstone OnDemand stays competitive in talent management *Qlik Technologies is ready to ride the data visualization wave *Aruba Networks looks well positioned for the WiFi upgrade cycle *Adobe Systems continues its move to the cloud *Behind the big sales force reorganization at Symantec *Demandware brings the cloud to digital commerce *Why some savvy money managers like SolarWinds *Nimble Storage is ready to take on the big legacy vendors *Wall Street analysts keep boosting their Yahoo price targets *Is Fortinet primed to execute again after naming a new CFO? *Deal Report: RetailMeNot sees growth in digital coupons Order the January 2014 issue of TSP here: http://www.amzn.com/B004T6Z0ME Tech-Stock Prospector Managing Editor Rob DeFrancesco has more than 20 years of experience covering the tech sector. He is a former senior writer with Louis Rukeyser’s Wall Street. TechStockProspector.com, launched in 2003, is an investment-research service focused primarily on the networking, storage, security, wireless and software sectors. Annual subscription: $350. For more information or to place an order, call 800-392-0998.
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