ServiceSource (NASDAQ:SREV)

CAPS Rating: 1 out of 5

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Member Avatar TSIF (99.96) Submitted: 8/2/2014 8:06:35 PM : Outperform Start Price: $3.25 SREV Score: +12.24

I've been highly negative on Service Source in the past, watching it rise from $4.00 to $13.00 in 2012-2013 on a great deal of speculation, and then decay back down from $13 to $4 even faster until it broke below $4 on Friday, 1 August.

I'm not sure if this was capitulation. Sometimes a hard break to under $5 scares some investors. Real "junk status" is not clearly defined and how institutional investors decide to play it can vary, but usually they don't automatically dump as the urban legend has it.

Service Source is now trading at 1.33 P/S which might interest peers who think they can cut the costs. P/B is 1.70. There is almost $3.00 per share in cash. But of course if you burn cash, you can't count it as an asset while the smoke is coming from it faster than you can count it.

Service Source looks like it might have potential, but discussions by management about "our hybrid operating model,” said Mike Smerklo, Chairman & CEO of ServiceSource. “As such, we are announcing plans to create two separate business units for our Managed Services and SaaS operations and to align our customer-facing teams along these different efforts. "

Can be a Hail Mary that rarely works, or at a minimum takes time and burns more cash even more rapidly.

Service Source does have cash, after about $185M in shares issued over the last three years. Burn rate of $9M per quarter gives them time. The question is what will they do with it.

Not sure if I'm going to ride this for a bounce or longer term. I generally don't like "creating" business models, "align", etc. It acknowledges problems which is a heck of a lot better than denying them or covering them up, but it doesn't mean they will work. The company is too broad and 2,900 employees is a lot of mouths to feed.

The rise back to $13 in 2012 and 2013 shows some potential, but it also shows that bagholders at these levels may sell on any sign of strength, as trust might be lacking.

Needs watched, and not "fallen in love with" if it does bounce....

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Member Avatar marctumson (< 20) Submitted: 11/15/2011 4:06:27 AM : Outperform Start Price: $13.39 SREV Score: -132.01

SREV's is currently on a roadshow with it's new suite of in-house developed cloud solutions' stack - CRM, Installed Base, Quote Generation, BI and MI products - catering directly to client needs and what's more they are using a technology which will not be outdated soon - think mobile web apps.
This is helping SREV to sign more and more clients in a touch economic climate as they look to retain service share and keep costs low by partnering with the clear sector leader.
As a result SREV is bucking the trend and steadily increasing EBITDA while keeping it's own costs low by investing in the products that their clients need rather than because they can, thus attracting investors like General Atlantic and bringing in leadership talent from Salesforce.com, Oracle and others.
While SREV is not immune to market forces - who is? - it is clear that this company will continue to dominate it's corner of the IT services sector.
The interesting thing will be to see if any of the big boys out there decide to buy this successful organisation.

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Member Avatar techguru12 (< 20) Submitted: 10/21/2011 6:44:35 PM : Outperform Start Price: $12.30 SREV Score: -130.81

SREV is poised to rebound ... a great company with a clever and recession-proof business model. They beat earnings and inexplicably fell in price. This is a bargain.

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Member Avatar MoatStocks (< 20) Submitted: 9/15/2011 12:50:43 PM : Outperform Start Price: $15.86 SREV Score: -142.25

It is addressing a need for Service Relationship Management at enterprise level (for many industries) with a comprehensive approach that includes - Providing Thought leadership, Cloud Applications, ManageServices, and BPO. And this while committing to top line revenue growth to all its customers. That's as strong a business committment I have seen in a LONGGG time. They have all the elements of a sustainable business (First mover, Redefining SRM, and Creating a New Model) - so let's see how they execute!! Its worth keeping an eye on.

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Member Avatar lakeway99 (< 20) Submitted: 8/17/2011 1:39:47 PM : Outperform Start Price: $17.25 SREV Score: -146.74

Since their IPO, I think SREV has support at $15/share, currently, and $13/share, if the market really tanks. They are clear about their primary business focus, (revenue management and enhancement), and continue to add clients and expand services to existing clients.

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Member Avatar robertshrestha (61.03) Submitted: 8/14/2011 4:57:45 PM : Underperform Start Price: $16.97 SREV Score: +145.99

Heavy insider selling, weak operating margins, high P/E, no obvious moat that I can see. Not much to like here.

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