Updated Aug 13 at 5:04pm ET.
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A federal court has upheld the removal of the de minimis loophole, which previously allowed goods worth less than $800 to enter the U.S. without paying taxes or duties. This change means that thousands of small international shipments that once bypassed formal customs will now face stricter reporting and tax requirements.
This is a helpful development for the company because its software manages the complex digital paperwork and data exchange between retailers and suppliers. As importing becomes more complicated and regulated, suppliers who previously operated under the radar will likely need more automated tools to handle the increased data and compliance burden. This strengthens the demand for the company's network as the standard way to move goods into the U.S. retail market.
Source: CNBC
Stifel Nicolaus raised its price target from $60 to $70 following the company's second-quarter results. The firm was encouraged by the company's ability to exceed its own financial goals for the quarter. This higher target reflects a view that the business is executing well as it connects more retailers and suppliers through its digital network.
Source: Stifel Nicolaus
D.A. Davidson raised its price target for the stock from $55 to $65. This change follows a second quarter where the company beat expectations for both sales and profit. While the new target is still below the current trading price, the large increase shows the firm is gaining more confidence in the company's ability to grow its supply chain network.
Source: D.A. Davidson
Morgan Stanley raised its price target for the company from $57 to $59 after the latest earnings report. However, the firm kept its underweight rating, which is a signal that it expects the stock to perform worse than other companies in the same sector. At the current price of about $73, this target suggests the firm sees the stock as being priced too high for its actual value.
Source: Morgan Stanley
The company reported adjusted earnings of $1.27 per share, which was well ahead of the $1.09 analysts expected. Revenue grew 6 percent to about $198 million, driven by a similar 6 percent rise in recurring revenue from customers who pay for ongoing access to the network. This growth is important because it shows the company is successfully keeping and adding to its base of over 50,000 retailers and suppliers.
Management also raised its financial goals for the full year after selling off a part of the business that was no longer a core focus. Adjusted EBITDA, a measure of profit that strips out certain non-cash costs, rose 19 percent to about $67 million. This suggests the company is becoming more efficient as it scales, leaving more profit on each dollar of sales even as it continues to invest in its software platform.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Analysts recently updated their views following the company's latest earnings report. While 10 of 23 analysts rate the stock a buy, the average price target of $65 is 18% below the current share price.
Management has a perfect record of clearing the bars they set for themselves, beating profit expectations for eight straight quarters. You can generally trust the numbers they put out.
| Expectation | |
|---|---|
| EPS | $1.22 |
| Revenue | $198M |
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