Shares of the e-business software maker were off $9.38 at $69 in Tuesday morning trading on the Nasdaq. By midday, the stock bounced back slightly and was down $6.94, or about 9 percent, to $71.44.
The San Mateo, Calif.-based company, whose services include providing software so companies can do business with customers via the Internet and through other channels, flew past estimates in its third quarter, beating earnings expectations by 3 cents a share.
Credit Suisse First Boston analyst Brent Thill said while Siebel remains the gorilla in the customer relationship management software (CRM) market, growth in core U.S. business accounts is slowing more than most had expected.
Growth in U.S. business accounts was about 40 percent year over year and 15 percent sequentially, down from 60 percent year-over-year growth and 20 percent sequential growth in 1999.
The company's new primary growth engines are in midmarket and international sales, and should more than make up for losses in the company's core domestic business with large companies, Thill said.
"It appears U.S. (business) accounts are digesting the first wave of major CRM applications, leaving the door open for (Siebel) and other vendors to round out the CRM vision with additional applications," Thill said, adding that the company's spring product release could provide the next catalyst.
Thill said the company's unequaled success in past years has had investors asking whether its "torrid growth" can continue, and he noted that the company has said it believes the current perception of an economic slowdown is analogous to the widespread Y2K fears: more hype than reality.
"While no company is completely insulated from a total economic meltdown, we believe (Siebel) would hold up better than most because...(it) has assembled the broadest platform of products enabling...long-term customer relationships" Thill said.