It has been about a month since the last earnings report for LogMein (LOGM). Shares have added about 0.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is LogMein due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
LogMeIn Q2 Earnings & Revenues Surpass Estimates
LogMeIn reported second-quarter 2020 adjusted earnings of $1.54 per share, which beat the Zacks Consensus Estimate by 24.2% and also jumped 31.6% year over year.
Revenues of $350.7 million surpassed the consensus mark by 7.3% and also improved 11.9% year over year.
LogMeIn did not hold a conference discussing second-quarter 2020 results or issue any guidance due to its impending acquisition. Notably, in December 2019, the company entered into a definitive agreement to be acquired by global private equity firms Francisco Partners and Evergreen Coast Capital Corp.
Unified Communication and Collaboration business revenues increased 12.8% year over year to $194 million.
Identity and Access Management revenues rose 14.3% from the year-ago quarter to $112 million.
Customer Engagement and Support business revenues climbed 4.7% on a year-over-year basis to $45 million.
The company’s gross renewal rate across all products was nearly 80%.
International revenues constituted 22% of total revenues in the second quarter.
Moreover, in the quarter under review, adjusted EBITDA increased 24.9% year over year to $119.3 million. Adjusted EBITDA margin expanded 350 basis points (bps) on a year-over-year basis to 30.5%.
LogMeIn’s non-GAAP operating income increased 28.5% year over year to $102.3 million. Operating margin expanded 380 bps on a year-over-year basis to 29.2%.
Balance Sheet and Cash Flow
LogMeIn had cash and cash equivalents of $249.5 million as of Jun 30, 2020, compared with $189.6 million at the end of first-quarter 2020.
The company generated $107 million of adjusted cash flow from operational activities and $88.6 million of adjusted free cash flow in the reported quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 39.71% due to these changes.
Currently, LogMein has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise LogMein has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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LogMein, Inc. (LOGM): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.