Smartsheet Inc., a leading enterprise workflow collaboration and automation software maker, experienced a sharp decline in its stock price of over 20% following its fiscal Q1 2024 earnings report. Despite reporting strong results, investor concerns were raised due to mixed forward guidance, leading to a sell-off. However, the company’s growth in high-end customers, profitability, and expansion of artificial intelligence capabilities, coupled with its impressive client roster including Fortune 100 companies, suggests that there may be more to Smartsheet’s story than meets the eye.
Key Points
1. Smartsheet’s stock experienced a significant drop of over 20% after reporting mixed guidance in its fiscal Q1 2024 earnings report. Investors reacted negatively to the uncertainty and rushed to sell their shares.
2. Despite the stock decline, Smartsheet’s Q1 2024 revenues increased by 31% compared to the previous year. The company also achieved non-GAAP profitability for two consecutive quarters, indicating positive financial performance.
3. Smartsheet boasts an impressive client roster that includes Fortune 100 companies like Boeing, Adobe, IBM, Intel, Microsoft, Proctor & Gamble, and Netflix. This demonstrates the widespread adoption of Smartsheet’s enterprise workflow collaboration and automation software.
Smartsheet Inc., a software company that specializes in enterprise workflow collaboration and automation, experienced a significant drop in its stock price, declining over 20% following its fiscal Q1 2024 earnings report. Despite reporting strong results, the company provided mixed guidance for the future, causing investors to panic and sell off their shares.
However, a closer look reveals that Smartsheet continues to grow its high-value customer base, with a 42% increase in customers generating at least $100,000 in annual contract value (ACV). The company has also expanded its artificial intelligence capabilities on its platform, offering features such as intelligent assistants, project and portfolio intelligence, and image and video manipulation. Competitors in this segment include Trello, Asana, and Slack.
Smartsheet counts Fortune 100 companies such as Boeing, Adobe, IBM, Intel, Microsoft, Proctor & Gamble, and Netflix among its clients. In addition, the company has seen new customer wins, including Liberty Media, Hostess Brands, and 811 Group, while expanding its services to existing enterprise customers like Motorola Solutions, Eli Lilly & Co., Foxtel, and Novocure.
The company achieved profitability in its fiscal Q4 2023 and continued to grow profits in fiscal Q1 2024, surpassing analyst estimates. Its revenues also grew by 31% year-over-year, reaching $219.89 million, beating expectations. Smartsheet reported a non-GAAP earnings-per-share (EPS) profit of 18 cents, compared to the projected eight cents.
Furthermore, the company’s billing and ACV also experienced growth, with calculated billings increasing by 20% year-over-year to $215.5 million, and an annual contract value of $100,000 or more growing by 42%.
Although Smartsheet provided mixed guidance for the future, with in-line EPS estimates for fiscal Q2 2024 and raised full-year EPS estimates for fiscal 2024, the market reacted negatively, resulting in a significant decline in stock price. The company reaffirmed its full-year revenue and calculated billing growth outlook.
Looking at the stock chart, Smartsheet’s shares attempted an ascending triangle breakout before its Q1 2024 earnings report but plummeted after the release due to investor concerns. The stock found support at the weekly 50-period moving average and rejected the weekly 20-period EMA, indicating potential levels of resistance and support.
Overall, while Smartsheet’s stock faced a decline, the company’s financial performance and customer growth paint a positive picture.
