Concur's Perfect Trip Initiative Shows Potential - Analyst Blog

On Jun 20, 2014, we issued an updated research report on Concur Technologies Inc. CNQR. Concur is a leading provider of integrated travel and expense management solutions.  The Perfect Trip initiative that was started a couple of years back has been benefiting the company by increasing its distribution capacity and integrating the travel space. In the second quarter 2014, the company witnessed strong new customer growth across the segments.

Concur's Perfect Trip initiative has been conceived to enhance and improve travel experience, especially for corporate travelers. As a part of this initiative, Concur has been investing in several companies in the travel industry with the aim to bring together all the elements for a perfect trip. For this the company has a well-defined software development methodology, which allows it to deliver products that satisfy the business needs and meets commercial quality expectations. This initiative is driven by the presence of an open platform - Travel & Expense (T&E) that makes the travel ecosystem more efficient and competitive. Recently, it announced that the Concur Perfect Trip Fund will be investing around $150 million in Table8 to roll out their novel restaurant reservations services on its T&E platform.

The company has witnessed strong customer growth for the past few quarters. New customers included those from financial institutions, technological firms and oil field companies leading to brisk expansion of the company's total customer base.

At present, the company has a remarkable base of over 23,000 customers. In this quarter itself, its customer base grew by more than 30%. In the last few months the company has added over 30 new partners for its Concur App Center. Some of the recent key new additions include VMware, Live Person, Boston University, Mitsui, the New York Yankees, Chevron, a large chemical manufacturer in Japan among others. Concur has also been providing travel expense management solutions for the U.S. government employees as per its E-Gov Travel Services 2 (ETS2) contract.

The increasing acceptance of this initiative by Concur's customers, partners, developers, and suppliers across the globe reflects the immense potential of this novel concept.

However, the company's financials have been affected by the increasing expenses in the quarter.  On a GAAP basis, the company had reported a net loss of $56.0 million or 99 cents per share in the second quarter, wider than the loss of $7.6 million or 14 cents in the prior-year period. Further, its business is highly dependent on strategic relationships with third parties, which can limit the visibility into the company's future. Moreover, this business is prone to be negatively impacted by global economic volatility as it leads to reduced spending on travel as well as lesser travel and expense transactions.

Concur currently carries a Zacks Rank #3 (Hold). Some other stocks worth considering in the industry include Blackbaud Inc. BLKB, Citrix Systems, Inc. CTXS and Advent Software, Inc. ADVS. While Blackbaud and Citrix Systems carry a Zacks Rank #1 (Strong Buy), Advent Software has a Zacks Rank #2 (Buy).

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