Why Everbridge (EVBG) Shares Are Trading Lower Today

Max Juang /
2023/08/08 5:07 pm EDT

What Happened:

Shares of critical event management software company Everbridge (NASDAQ:EVBG) fell 18.7% in the afternoon session after the company reported second-quarter earnings in which it lowered full-year revenue guidance and missed analysts' expectations. Additionally, next quarter's revenue guidance also missed Wall Street's expectations. Management touched on some of the factors influencing the reduced guidance, noting that "However, we also continue to experience headwinds booking large and especially perpetual revenue contracts. This dynamic is reflected in our updated revenue guidance for the second half of 2023." 

On the other hand, revenue and non-GAAP operating profit beat expectations slightly during the quarter. Overall, it was a weaker quarter as the reduced outlook was a major negative alongside the issues raised by management.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Everbridge? Access our full analysis report here, it's free.

What is the market telling us:

Everbridge's shares are quite volatile and over the last year have had 41 moves greater than 5%. But moves this big are very rare even for Everbridge and that is indicating to us that this news had a significant impact on the market's perception of the business. The previous big move was four months ago, when the stock dropped 6.82% on the news that Florida terminated its contract with the company after a false “Emergency Alert” test was mistakenly sent out to smartphones at 4:45 a.m. Following the news, Stephens analyst downgraded the stock's rating from Overweight (Buy) to Equal-Weight (Hold).

Everbridge is down 19.7% since the beginning of the year, and at $23.01 per share it is trading 45.2% below its 52-week high of $41.99 from August 2022. Investors who bought $1,000 worth of Everbridge's shares 5 years ago would now be looking at an investment worth $469.59.

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