Olo (OLO) Reports Q3: Everything You Need To Know Ahead Of Earnings

Kayode Omotosho /
2022/11/08 2:15 am EST

Restaurant software company (NYSE:OLO) will be announcing earnings results tomorrow after the bell. Here's what you need to know.

Last quarter Olo reported revenues of $45.6 million, up 27% year on year, missing analyst expectations by 0.5%. It was a weak quarter for the company, with revenue guidance for both the next quarter and full year missing analysts' expectations.

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

This quarter analysts are expecting Olo's revenue to grow 24.7% year on year to $46.6 million, slowing down from the 35.9% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.01 per share.

Olo 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 only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 4.37%.

Looking at Olo's peers in the vertical software segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. Q2 Holdings delivered top-line growth of 14.2% year on year, missing analyst estimates by 1.37% and 2U reported revenue decline of 0.05% year on year, exceeding estimates by 0.09%. Q2 Holdings traded down 5.64%, and 2U was up 1.88%. Read our full analysis of Q2 Holdings's results here and 2U's results here.

The technology sell-off has been putting pressure on stocks since November and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 6.47% over the last month. Olo is up 3.15% during the same time, and is heading into the earnings with analyst price target of $11.8, compared to share price of $8.18.

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.