Insider Buying, Large Institutional Ownership, Pandemic Recovery and Earnings

Insider Buying, Large Institutional Ownership, Pandemic Recovery and Earnings

Good day everyone,

We are initiating coverage on ServiceSource International, Inc. (NASDAQ: SREV), a company providing B2B inside sales support and other services globally.

Current price $1.66/share
Shares outstand (est.) 96.6M
Shares in float (est.) 61.4M
Institutional holdings 77.9%
Revenue (ttm) $198M
Market cap $160M

Levered Free Cash Flow is $19.27M and their Price/Sales ratio is only .90X.

SREV is a company with 3,000 employees and operates in 170 countries.

As the company stock chart indicates, SREV shares have crossed their 50 DMA and 200 DMA of $1.63 and $1.53 respectively in a bullish manner. The Simple Moving Average is green at all levels. These data indicate shares that could be trending.

ServiceSource is a provider of customer and revenue lifecycle management solutions. The company is focused on service offerings that integrate data, processes, and cloud technologies. They generate revenue through a pay-for-performance model, where clients pay a commission based on renewal sales generated. Most of the firm’s revenue is generated in North America and Latin America, and the rest from Europe, the Middle East, Africa, and Asia-Pacific.

List of Impressive Major Holders

Institutional Investors Blackrock, Renaissance Technologies, and Primecap Management have all reported owning more that 5% of the SREV shares this month. Edenbrook Technologies owns 18% of the company shares. Gary Moore, CEO, has been a buyer of the company shares with his most recent purchase being 61,496 shares at $1.58/share last August.

Third Quarter 2020 (mrq) Financial Results

Total Revenue of $45.8 million
GAAP Net Loss of $5.6 million; Non-GAAP Net Loss of $1.6 million
Adjusted EBITDA of negative $0.2 million.
Positive Free Cash Flow of $3.4 million

SREV had FYE 2019 revenues of $216.1M and for the nine months ending September 30, 2020 had revenues of $143.5M. Revenues for 2020 could fall short of 2019 but the pandemic has challenged revenues for many companies. They should be releasing Q4 2020 revenues this month.

The company has announced it will release Q4 and FYE 2020 results on February 25th. We think when a company announces their earnings call two weeks ahead of time, in a press release, it’s a positive sign but you should draw your own conclusion.

There are financial metrics such as P/S ratio and positive free levered cash flow that seem to indicate value in SREV shares. Noting that the CEO and institutions are accumulating shares may mean a positive future for the company in the near term. Do your due diligence and see what you conclude.

Updated report to be issued via email and SMS.

The Traders News Group


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