What Happened:
Shares of critical event management software company Everbridge (NASDAQ:EVBG) jumped 5.05% in the morning session after the company reported first-quarter results exceeding analysts' revenue, free cash flows, and earnings per share estimates. The guidance provided by the company was mixed with revenue guidance for the next quarter surpassing analysts' expectations while EPS fell short. Additionally, full-year revenue and EPS guidance were roughly in line with Consensus. A significant development this quarter was a deceleration in customer growth, representing a rare quarter of sequential customer loss. Despite this, the management team provided some reassuring commentary regarding the adoption of the firm's event management system following a recent blunder that caused the state of Florida to cancel its contract. After the incident, Stephens analyst Brian Colley noted that "the negative publicity resulting from the event creates risk of reputational damage that could spur additional public alerting customer losses." However, the company highlighted in its earnings press release that the Republic of Mauritius completed implementation of the company's population alerting solution, which is aimed at keeping 1.3 million residents and over 1.4 million annual tourists safe.
What is the market telling us:
Everbridge's shares are somewhat volatile and over the last year have had 58 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move was 18 days ago, when the company 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 9.91% since the beginning of the year, and at $25.83 per share it is trading 39.8% below its 52-week high of $42.90 from May 2022. Investors who bought $1,000 worth of Everbridge's shares 5 years ago would now be looking at an investment worth $608.82.
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