Shares rose sharply on Wednesday after the provider of work-management software pleasantly surprised analysts with its earnings report for the fiscal quarter ended January 31.
(ticker: SMAR) Posted Earnings per share decreased 7 cents in the fourth quarter, swinging from a loss of 12 cents per share a year earlier and beating analyst expectations for a loss of 1 cent per share, according to FactSet. Total revenue increased 35% year over year in the fourth quarter.
“Profitability has been a surprise,” wrote RBI Capital Markets analyst Rishi Jaluria, who maintained his Sector Perform rating but raised his price target to $43 from $36 in a Wednesday report. Shares of Smartsheet rose 10.5% to $42.35 in premarket trading on Wednesday.
“Stepping back, we think that’s what Smartsheet investors can expect: profitability, conservative guidance and differentiation ahead of competitors,” Jaluria said.
JP Morgan analyst Pinjalim Bora was optimistic. He maintained his overweight rating and raised his price target to $55 from $45 in a report on Wednesday, noting that “operating leverage in the business is being driven by cost-optimization efforts” such as “main Trimming expenses in locations that support the “sales or product”. Curbing the level of hiring after the explosion of hiring in early 2022 was also a positive, he said.
The company offered total revenue guidance of $943 million to $948 million for the full fiscal year 2024, up from the $766.9 million reported for fiscal year 2023.
“We view our preliminary FY24 guidance as one of the more conservative in our space, as the company takes into account macro sluggishness,” Needham analyst Scott Berg wrote in a report Wednesday. He maintained his buy rating and $57 price target.
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