DemandTec, Inc.: A future in demand
DemandTec, Inc. (Nasdaq: DMAN)
San Carlos, CA.
http://www.demandtec.com
52-week low / high: $8.95 / $20.50
Shares Outstanding: 26.26 million
Market Capitalization: $431.3 million
You probably don’t know it, but every time you go shopping you indirectly use this company’s products. That’s because DemandTec, Inc. (Nasdaq: DMAN) makes consumer demand management software that helps retailers and consumer product companies better understand customers’ buying habits and optimize merchandise pricing, promotions and discounts.
It’s good space to be in, especially when your client list includes the biggest names in the business.
San Carlos, Calif.-based DemandTec, which went public on Aug. 9, has its software implemented by industry giants Wal-Mart, Best Buy, Safeway, Target, Nestle and Procter & Gamble, among others.
During the second quarter of fiscal 2008, the most recent period for which data is available, the company saw its revenue jump 40% to $14.7 million from $10.4 million a year earlier. However, for the three months ended Aug. 31 the software maker slipped to a net loss of $0.26 million, or $0.02 per share, compared with a net income of $0.14 million, or $0.01 per share, in the second quarter of fiscal 2007.
“Given the early stage of the consumer demand management market, revenue growth and market share are among the company’s top strategic priorities,” said CFO Mark Culhane in a statement. “However, we are also highly focused on driving profitability and cash flow.”
That’s probably why the company currently retains all available funds and says it plans on using future earnings for its business operations. It does not intend on paying cash dividends any time soon.
Wall Street apparently believes in DemandTec’s long-term prospects, because it expects the company to bounce back to profitability in the fiscal third quarter with earnings of $0.03 per share, according to a poll of five analysts by Thomson Financial.
Looking ahead, net income for the entire fiscal 2008 is projected at $0.08 per share, after which it is forecasted to more than triple to $0.28 per share in fiscal 2009. Revenues are projected at $60.48 million, then rising 30.7% to $79.05 million.
It looks likely that DemandTec’s software, and its shares, will be in increased demand.
Note: DemandTec (Nasdaq: DMAN) is on the “Watch List” of Rising Star Stocks, a subscription investment newsletter from Business Financial Publishing, which also publishes SmallCapInvestor.com. As a Watch List company, DemandTec displays many characteristics found in successful stock winners, and is being closely monitored for possible inclusion in the Rising Star Stocks portfolio at a later date.
