NetSuite (N, Financial) recently delivered strong results for the third quarter. The company’s results exceeded its own expectations as it posted a good 34% increase in revenue, and even earnings outpaced consensus estimates. The company is also seeing some strong traction in the adoption of its cloud service. Management is confident that this traction will continue in the future, enhancing its performance in the quarters coming ahead. NetSuite is also making several impressive moves to hold a bigger piece of the pie. Its transitional efforts in the past have been commendable and is contributing a lot to attract more customers.
Increasing the customer base
The company is highly focused on increasing its customer base. It is focusing on bringing in new products in the market to attract the customers. NetSuite has recently introduced the NetSuite 14.2 with exciting features helping the customers to find the information regardless of the device. There are some other exciting additional features in NetSuite that makes it suitable for both business to customer or B2B e-commerce platforms. This also strengthens its long term prospects as with the growth of e-commerce channels, NetSuite will have more opportunities in this space.
Moving further, NetSuite’s OneWorld offering is showing positive signs and the company is expecting it to be a key growth driver for it in future. This offering by the company is rapidly gaining traction in the market as it has got some exciting features which meets the specific requirements of the industry. This is expected to enhance NetSuite’s growth in the coming quarters. Seeing the bright opportunities, NetSuite is also focusing on expanding its foot prints across national boundaries.
It is organising a major customer event named Suite Connect in the regions such as U.K and Australia mainly aiming at attracting more customers to it and also making a place for it in the international markets. Moreover, the company is also pleased with the growth in the ASP. With this NetSuite is expecting positive impact on the company’s bottom line in the coming days.
Better times ahead
Management is further confident of increasing its market share in the near term. The company has also posted an upbeat outlook. NetSuite is expecting its revenue to be between $154 million to $156 million. On the other hand the analysts had been modelling $152.3 million on the top line. While on the earnings front, NetSuite expects its earnings to fall in the range between $0.08 per share and $0.10 per share. The company’s estimates for bottom line came in line with consensus estimates.
Out of the robust portfolio of products, it is seeing good opportunities from the SuiteCommerce offering. NetSuite is seeing good response from the customers for it in the market. It enables the combination of e-commerce and point-of-sale capabilities in a single web based product. Besides retail, NetSuite is planning to expand this offering to other segments such as in wholesale distribution and manufacturing. All these efforts by the company are expected to offer additional opportunities for growth in the long term to it.
Conclusion
NetSuite’s earnings are expected to grow in the long term. In addition, the company is focusing on various initiatives which can help the stock to grow in the future. Hence, NetSuite looks like a good investment for the long run.
