What Happened:
Shares of user support software provider WalkMe (NASDAQ: WKME) fell 18.2% in the after-market session after the company reported first-quarter results that narrowly beat analysts' revenue estimates, though the revenue growth remained weak. Earnings per share (EPS) also beat. However, cash burn increased. In addition, the revenue guidance for the next quarter and full year were below Consensus. On a more positive note, the operating income guidance surpassed expectations for both the next quarter and the full year. The topline guidance implies an anticipated deceleration in revenue growth to high single digits compared to the robust double-digit growth observed in the previous year. Overall, the results were weak, and the stock reaction is showing that the market is disappointed by topline results and guidance which wasn't made up for by slightly better profit results and guidance.
What is the market telling us:
WalkMe's shares are a little volatile and over the last year have had 54 moves greater than 5%. Moves this big are very rare for WalkMe and that is indicating to us that this news had a significant impact on the market's perception of the business.
WalkMe is down 28.2% since the beginning of the year, and at $8 per share it is trading 44.1% below its 52-week high of $14.32 from August 2022. Investors who bought $1,000 worth of WalkMe's shares at the IPO in June 2021 would now be looking at an investment worth $277.68.
Is now the time to buy WalkMe? Access our full analysis of the earnings results here, it's free.