SNCR Thoughts

Investment Analysis Clubs Saul’s Investing Discussions
1

Stock Price: $24.28
TTM EPS: $2.23
PE: 10.9
1YR PEG: 0.96

Here is what I posted after the last quarter:

http://discussion.fool.com/1069/sncr-thoughts-31980675.aspx

In short, I’m much more interested today in SNCR. I’ve not yet invested, but it looks like a winner. Here’s why:

The big risks I see in the business are their current investments. Last quarter, we heard about the creation of the Enterprise Business Unit (EBU) in conjunction with Goldman Sachs. I’m getting the feeling these risks will pay off and turn into opportunities. I suggest listening to the call to determine if you feel the same.

Even with the investments, SNCR forecasts earnings growth of 5% at the mid-point of guidance. I think they have a good opportunity to beat that and position themselves for long term growth.

One last question: There is a large gap (no pun intended) between non-GAAP and GAAP earnings. Any thoughts on that are appreciated?

Let me know what you think please!

Take care,
A.J.

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There is a large gap (no pun intended) between non-GAAP and GAAP earnings. Any thoughts on that are appreciated?

Hi Phoolio,
They gave a crystal clear reconciliation in their press release.
Sal

3

There is a large gap (no pun intended) between non-GAAP and GAAP earnings. Any thoughts on that are appreciated?

Hi Phoolio,
They gave a crystal clear reconciliation in their press release.

Hi Saul,

I see the reconciliation provided in the release and still have some questions.

Looking at the PE on a non-GAAP basis at a price of $22.59, we get 10.1. On a GAAP basis, it is 25.4.

This represent a large discrepancy in my mind.
Now, I don’t confess to understand the impact of every line item in their reconciliation which is why I’m asking more questions about this. Most stocks I follow don’t carry such a large GAAP to non-GAAP difference.

Do we expect this to continue in perpetuity with SNCR?
While we look at non-GAAP numbers on this board, many of the market participants look at GAAP. Is this holding SNCR back? Or do we expect it to hold it back?

I’m asking for more insight if folks can offer.

Thanks,
A.J.