Today at 6:08 AM ET, Smartsheet stock fell 18% to $48.50 in the pre-market session. The stock fell after the company reported its results for the first quarter of fiscal 2021 (quarter ended April 30) on Wednesday. The company missed the first-quarter billings expectations and provided a lower-than-expected outlook for the second quarter. However, Smartsheet’s revenues and earnings numbers for the first quarter beat Wall Street’s consensus estimate.
Smartsheet’s earnings results for Q1 2021
In the first quarter, Smartsheet reported an adjusted EPS of -$0.11 compared to -$0.12 in the first quarter of fiscal 2020. The adjusted EPS beat analysts’ consensus estimate of -$0.19. Smartsheet generated sales of $85.5 million—a growth of 52.1% from the first quarter of fiscal 2020. The company beat analysts’ consensus revenue estimate of $81.3 million. In the first quarter, subscription sales rose 53.3% YoY (year-over-year) to $77.2 million and accounted for 90.3% of the total revenues. Calculated billings rose 30% YoY to $89.9 million in the first quarter, which missed analysts’ estimate of $94.1 million.
In the first-quarter earnings release, Smartsheet CEO Mark Mader said, “We delivered a good first quarter, given the market conditions.” He also said, “Smartsheet has become an increasingly mission-critical platform for enterprises seeking to enable a dynamic workforce; a workforce capable of working from anywhere, adapting to rapidly changing conditions, and staying deeply connected to their individual work and the mission of their teams, no matter the circumstance.”
In the second quarter, Smartsheet expects its total revenue to be between $86 million and $87 million. The company expects its calculated billings to be between $91 million and $93 million. Meanwhile, Smartsheet expects its non-GAAP EPS to be between -$0.18 and -$0.16 for the second quarter.
For fiscal 2021, Smartsheet expects its total revenue to be between $360 million and $370 million. The company also expects its non-GAAP EPS to be between -$0.54 and -$0.45 for fiscal 2021.
Wall Street analysts expected Smartsheet to report an adjusted EPS of -$0.14 on revenue of $88.2 million in the second quarter. Analysts also expect the company’s sales to rise 35.8% YoY in fiscal 2021 to $367.8 million. The sales could rise by 30.8% YoY in fiscal 2022 to $481.0 million. The adjusted net loss per share will increase from $0.49 in fiscal 2020 to $0.56 in fiscal 2021. Analysts also expect an adjusted net loss per share of $0.44 in fiscal 2022.
Analysts’ recommendations for Smartsheet
Among the 15 analysts following Smartsheet stock, ten recommend a “buy” and five recommend a “hold.” None of the analysts recommend a “sell.” Wall Street analysts’ mean target price on the stock is $50.58, which implies a 14.4% loss from the current level of $59.08. The consensus target price for the stock has increased from $48.50 in May—a growth of 4.3%.
Many analysts revised their target price for Smartsheet stock after its first-quarter results.
- Jefferies decreased its target price from $55 to $50.
- Citigroup decreased its target price from $58 to $51.
- Canaccord Genuity increased its target price from $45 to $55.
- Needham increased its target price from $60 to $67.
- BMO increased its target price from $48 to $51.
- Wedbush increased its target price from $40 to $45.
- D.A. Davidson increased its target price from $37 to $45.
Smartsheet stock rose 1.3% on Wednesday and ended the day at $59.08. At this closing price, the company’s market cap is $7.1 billion. Notably, the stock is trading 2.3% below its 52-week high of $60.45 and 91.1% above its 52-week low of $30.91.
Based on the closing price on Wednesday, Smartsheet stock was trading 6.4% above its 20-day moving average of $55.53. The stock is also trading 16.4% above its 50-day moving average of $50.75 and 22.7% above its 100-day moving average of $48.16. Smartsheet’s 14-day relative strength index number is 64 which indicates that it’s approaching the overbought zone.
Smartsheet stock has a middle Bollinger Band level of $55.53, while its lower Bollinger Band level is $51.26. On Wednesday, Smartsheet stock closed near its upper Bollinger Band level of $59.81, which suggests that it’s overbought.
On Wednesday, the Dow Jones Industrial Average (NYSEARCA:DIA) rose by 527 points or 2.05%. Also, the S&P 500 (NYSEARCA:SPY) and the Nasdaq Composite rose 1.36% and 0.78%, respectively. Read CFOs Expect a Dow Jones Crash: Is Double-Dip Next? to learn more.