Xoom Corp (NASDAQ: XOOM), provider of online money transfer services, announced its earnings report for Q3 2013 after market hours yesterday, the 22nd of October. The company seems to be making all the right moves as it shows initial turnaround with profits for last two quarters. It is aggressively targeting the US outbound money market reaching out to Latin America, India and many other countries. The company delivered a strong quarterly performance which has us impressed about the future potential from this stock. We are adding Xoom Corp to our positive watch-list.
XOOM Business Performance
The table below sums up the critical numbers for Q3 2013.
The revenue jumped 62% Y/Y in Q3 2013 to reach $ 32.3 million. The quarter was the second consecutive quarter of profitability at the company with the operating margin as well as the Net Income Margin improving significantly over the year ago quarter. The total transacted value jumped 95% to $1.5 billion with the company closing the quarter at a market share of 7% of the total US outbound money transfer market. The number of new customers added during the quarter went up by 31% Y/Y taking the current number of active customers to about 1 million, an increase of 39% over the previous quarter.
The company launched its Spanish app for Android and iOS devices to strengthen its reach into the Latin American community and also announced its money transfer service for non-resident Indians.
Actual performance v/s Analyst Estimates
The company beat the revenue analyst consensus estimate of $29.39 million by 9.9% and beat analyst earnings estimate by 7 cents.
Stock Market Response
The stock price of Xoom Corp closed the last trading session at a price of $35. However, following the earnings announcement the stock tanked over 5% in after-hours trade in-spite of the tremendous quarter the company delivered. The drop could have been on account of a Q/Q decline of 3.5% in the revenue of the company. However we feel the reaction is unwarranted and the drop in the stock price might have made the stock an attractive investment option.
It might be too early to take a decision with the company yet to prove its earnings and revenue generation ability on a sustained long term basis. Also considering the P/S multiple of 10.33 Xoom is not currently very attractive. However, Xoom Corp is on our positive watch-list and we will keep you posted on any opportunities which might open up for investors.
To see Xoom’s current price, please click here: (NASDAQ: XOOM)