Avalara (AVLR) Q2 Earnings: What To Expect

Jabin Bastian /
2022/08/07 6:27 am EDT
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Tax compliance software maker Avalara (NYSE:AVLR) will be announcing earnings results tomorrow after market close. Here's what investors should know.

Last quarter Avalara reported revenues of $204.5 million, up 33.1% year on year, beating analyst revenue expectations by 3.26%. It was a decent quarter for the company, with a strong top line growth. The company added 890 customers to a total of 19,160.

Is Avalara buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Avalara's revenue to grow 23.7% year on year to $209.1 million, slowing down from the 45.1% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.08 per share.

Avalara Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 7.06%.

Looking at Avalara's peers in the finance and HR software segment, some of them have already reported Q2 earnings results, giving us a hint of what we can expect. BlackLine delivered top-line growth of 25.8% year on year, beating analyst estimates by 1.52% and Paycom Software reported revenues up 30.8% year on year, exceeding estimates by 2.7%. BlackLine traded up 5.57% on the results, and Paycom Software was up 1.69%. Read our full analysis of BlackLine's results here and Paycom Software's results here.

There has been positive sentiment among investors in the software segment, with the stocks up on average 4.68% over the last month. Avalara is up 14.4% during the same time, and is heading into the earnings with analyst price target of $115.1, compared to share price of $95.55.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.