Life cycle management software company Tangoe Inc (NASDAQ:TNGO), and in turn, its shareholders, have had a tough few years. Back in 2013, the company traded at a little over $25 a share. Fast forward to 2016, and the company has hovered between $6-8 for the majority of the year.
A recent announcement just boosted its prospects, however, and there’s every chance that Tangoe could be set for a medium term reversal.
Here’s why.
First, for those not familiar with the company, it’s a small cap tech company that builds software to help entities keep track of assets, also referred to as life cycle management. It employs more than 2,300 individuals in the US, but only has a market capitalization of a little of $336 million – unusually low for such a large scale operation.
That out of the way, what is the development in question? The announcement relates to a recent deal struck with Vodafone Group Plc (ADR) (NASDAQ:VOD), which will see the two companies come together as part of a strategic partnership involving the latter’s Telecom Expense Management (TEM) operations.
Here’s what Al Subbloie, president and CEO of Tangoe, had to say on the partnership:
We are very excited about the synergy this strategic partnership can bring to current and future clients, as the Vodafone TEM business fits particularly well within the core of Tangoe’s broader solution suite,” said Al Subbloie, president and CEO of Tangoe. “We see tremendous potential to deliver additional value to Vodafone’s global base of enterprise customers through Matrix, which helps clients gain visibility, control, and financial management of critical IT assets, services, and usage.
Vodafone had this to say:
Telecom expense management is an important element in Vodafone’s total communications strategy. All parties stand to gain as Vodafone and Tangoe combine their reach and expertise to deliver world-leading TEM services to enterprise customers.
The partnership should serve to raise Tangoe’s profile in the space, and could pave the way for more high profile strategic collaborations going forward.
During 2015, the company generated $212 million revenues for a $3 million net gain, and at September 30, 2015, had a little over $36.5 million cash on its balance sheet.
DISCLAIMER: There is a substantial risk of loss with any speculative asset, especially small cap stocks. The opinions expressed are those of the author, and do not constitute recommendations to buy or sell a stock. Do your own research before committing capital.
