What Happened:
Shares of cloud infrastructure automation platform HashiCorp fell 25.6% in the pre-market session after the company reported first quarter results that beat analysts' revenue, remaining performance obligations (RPO, a leading indicator of revenue), and earnings per share (EPS) estimates. Cash position improved with operating cash flow at nearly breakeven. However guidance was weak and a major driver of the stock move. Revenue guidance for the next quarter missed Consensus. The full-year guidance was lowered, which is never a good sign and could imply company-specific challenges or lack of visibility around near-term fundamentals. Non-GAAP operating loss guidance was roughly inline. Management highlighted a weaker macro environment and " pressure in the buying process." HashiCorp also announced cost-saving measures and a headcount reduction of about 8%. Overall, it was a fine quarter for the company but underwhelming guidance was the focus.
What is the market telling us:
HashiCorp's shares are very volatile and over the last year have had 63 moves greater than 5%. But moves this big are very rare even for HashiCorp 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 3 months ago, when the company gained 7.22% on the news that analyst Gray Powell from BTIG initiated coverage on the company's stock with a Buy rating and a price target of $37.
HashiCorp is up 0.82% since the beginning of the year, but at $26.38 per share it is still trading 39.5% below its 52-week high of $43.62 from August 2022. Investors who bought $1,000 worth of HashiCorp's shares at the IPO in December 2021 would now be looking at an investment worth $306.76.
Is now the time to buy HashiCorp? Access our full analysis of the earnings results here, it's free.