Earnings To Watch: Avalara (AVLR) Reports Q1 Results Tomorrow

Radek Strnad /
2022/05/04 7:44 am EDT

Tax compliance software maker Avalara (NYSE:AVLR) will be announcing earnings results tomorrow after the bell. Here's what to look for.

Last quarter Avalara reported revenues of $195.1 million, up 34.8% year on year, beating analyst revenue expectations by 5.84%. It was a mixed quarter for the company, with a solid beat of analyst estimates but an underwhelming guidance for the next year. The company added 870 customers to a total of 18,270.

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 28.9% year on year to $198 million, slowing down from the 37.8% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.12 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 7.02%.

Looking at Avalara's peers in the finance and HR software segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. Paycom Software reported revenues up 29.8% year on year, exceeding estimates by 3%. Paycom traded up 9.11% on the results. Read our full analysis of Paycom Software's results here.

Triggered by the Federal Reserve's hawkish stance on interest rates, shares of technology companies have been facing sell-off in 2022 and software stocks have not been spared, with share price down on average 16.6% over the last month. Avalara is down 26.2% during the same time, and is heading into the earnings with analyst price target of $155.3, compared to share price of $76.44.

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.