Amber Road (AMBR): Global Trade Management in the Cloud

Edward Kim  |

Data from the World Trade Organization shows global merchandise trade volume growing from approximately $6.5 trillion in total imports in 2000 to over $18.6 trillion in 2014. Global trade slowed in 2015 and 2016, but the WTO forecasts a return to stronger growth this year and in 2018. "Global economic growth has been unbalanced since the financial crisis, but for the first time in several years all regions of the world economy should experience a synchronized upturn in 2017. This could reinforce growth and provide an additional boost to trade." The dramatic increase in global merchandise trade growth since the turn of the century has brought forth a corresponding increase in complexity in regulations, supply chain logistics, security and risk management. This has been the driving trend behind companies such as Amber Road (Nasdaq: AMBR), which provide companies with on-demand global trade management solutions.

Amber Road describes its offering as a complete solution for customers that includes:

  • Enterprise Software
  • Regulatory Content
  • Professional Services and Support
  • Supply Chain Network
  • Configurable Architecture

The company says that many of its customers, including some of the world's largest enterprises, have automated their global trade processes for the first time with Amber Road solutions, replacing a combination of spreadsheets, home grown solutions and manual processes with a comprehensive suite of end-to-end products that automate the trade process.

Source: Amber Road Corporate Presentation, June 2017

One customer, NCR (NYSE: NCR), provided a quote for Amber Road's website from its Director of Global Logistics Sourcing.

Once you can see the shipments moving in transit, you can see when something’s going to be late and adjust to it. That’s helped to reduce the amount of expediting that we’ve had to do. NCR will see a seven-figure benefit from the implementation; it has added definite value for us.

The company has been increasing revenue and decreasing its loss from operations in recent years ($73.2 million in revenue and a $17.3 million operating loss in 2016), and its Q1 earlier this year showed a continuation of that trend. Amber Road will announce Q2 numbers after the close on Aug. 3rd, and we'll be watching to see if management continues to demonstrate its ability to manage growth.

Last week, the company announced that it had added advanced Politically Exposed Persons (PEPs) lists to its global knowledge database. “The addition of this comprehensive set of PEP lists to the screening process enhances our clients’ ability to mitigate the risk of doing business with people prone to corruption charges such as money laundering, bribery, terrorism financing and illegal drug smuggling,” said Ty Bordner, VP of Solutions Consulting.

AMBR stock is up about 30% from its spring 2017 lows, but the current market capitalization of $260 million still feels light given the company's customer base, revenue and operating loss trends. It may simply be a function of needing to articulate the story better to investors, but we think the company is worth watching amid a macro environment of increasing global connectivity and trade.

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DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:

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