Smartsheet Inc. (NYSE: SMAR) has confirmed the release date for its fourth-quarter earnings and revenue report, which is on Tuesday, March 15, 2022.
What to look for
Earnings: Stockearning’s Estimated EPS for Q4 is expected to be $0.44 per share. In the third quarter, the company produced an earnings surprise of 30.56%, with an actual loss per share of $0.25 versus a predicted EPS loss of $0.36. Historical EPS performance shows that the company has i8n the past 12 quarters topped estimates 14 times (93%) and missed once (6%).
Revenue: The company is expected to post sales of $151.58 million in the quarter under review. In the same quarter a year ago, the company had sales of $109.87 million, suggesting a positive YoY growth rate of 38%. The company expects to report sales of $545.02 million for the full year, and for the next fiscal year, analysts are calling for revenue of $721.51 million.
Stock movement: SMAR shares have lost 24.1% since the company released its last earnings release. Interestingly, following the earnings release, the company's shares have been DOWN 8 times in the past 15 quarters. So, the historical price reaction suggests a 53% probability of the share price going DOWN following the earnings release. According to the Stockearning algorithm, the predicted volatility on the first day is +/-8%, while the predicted volatility on the seventh day is +/-11%.
What analysts are saying: Citi analyst Tyler Radke slashed the company’s price target from $80 and $60 and maintained a Hold rating on the shares. Radke told investors in a research note that investor scrutiny has gotten more acute towards any signals of shrinking growth and weaker profitability tales due to the valuation pressures and rising uncertainty in the systems software industry. As a result, Smartsheet's Q4 profits are expected to be "more muted," according to the analyst.
RBC Capital analyst Rishi Jaluria also lowered the company’s price target from $73 to $63 and maintained a Hold rating on the shares. According to the analyst, the Smartsheet's Investors Day presentation formally pushed back the timetable to reach $1 billion in revenue, and the shares slumped 8%. However, Julia adds that the decision was unexpected and that the rest of the presentation was "excellent," with projections of 30 percent growth and 10 percent free cash flow for FY25, as well as strong data indicators on enterprise traction.
Canaccord analyst David Hynes slashed his price target on SMAR from $90 to $80 and maintained a Buy rating on the shares. The analyst day underscored factors that might have confused investors, such as management's expectation that the company will be a "Rule of 40" firm in 2025, defined as 30 percent growth and a 10% FCF margin. He interpreted this as indicating the prospective growth/margin mix rather than the expected rate of decline in growth rates. However, there appears to be some market ambiguity here, putting pressure on the stock.
Related News
Vail Resort Inc. (NASDAQ: MTN) Earnings Expectation, Fiscal Q2 2022 EPS of $5.73 on revenue of $966.3 Million
Oracle Corporation (NYSE: ORCL) Misses Q3 2022 Earnings But Matches Revenue Estimates