Why Jamf (JAMF) Stock Is Trading Lower Today

Radek Strnad /
2024/02/28 12:13 pm EST

What Happened:

Shares of apple device management company, Jamf (NASDAQ:JAMF) fell 17.3% in the pre-market session after the company reported fourth-quarter results with full-year revenue guidance below estimates, suggesting a slowdown in demand. The company did narrowly topped analysts' revenue expectations. Management provided some details on the factors impacting the weak outlook for 2024. These include: 1.) Constrained hiring practices in the tech space, as 46% of ARR (annual recurring revenue) comes from information and communication segments 2.) COVID and its lingering effects on the education sector. 3.) Less strategic revenue sources projected to perform slightly worse than in 2023. Overall, this was a weaker quarter for Jamf.

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What is the market telling us:

Jamf's shares are quite volatile and over the last year have had 13 moves greater than 5%. But moves this big are very rare even for Jamf and that is indicating to us that this news had a significant impact on the market's perception of the business. 

The biggest move we wrote about over the last year was 7 months ago, when the stock dropped 13.8% on the news that company reported second quarter sales roughly in line with analysts' expectations. Billings missed. Revenue retention rate declined and was attributed to "muted customer hiring that affects device growth at renewal primarily driven by the difficult macro environment." The weaker topline growth was also affected by a faster decline in the less strategic sources of revenue (license, services and on-premise revenues ) which represent roughly 6% of overall revenue and are expected to go to zero. As a result, revenue guidance for the next quarter missed Wall Street's expectations. Also, the full year revenue guidance was lowered from total revenue of $559.0 to $563.0 million down to $555.0 to $558.0 million. Overall, the market struggled to digest the implications of the external and internal factors impeding revenue growth mainly due to a weaker macro environment.

Jamf is up 2.8% since the beginning of the year, but at $17.81 per share it is still trading 20% below its 52-week high of $22.27 from July 2023. Investors who bought $1,000 worth of Jamf's shares at the IPO in July 2020 would now be looking at an investment worth $454.65.

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