Why Smartsheet (SMAR) Shares Are Getting Obliterated Today

Kayode Omotosho /
2023/06/08 9:31 am EDT

What Happened:

Shares of project management software maker Smartsheet (NYSE:SMAR) fell 18.2% in the after-market session after the company reported first quarter results that beat analysts' revenue, subscription revenue, free cash flow, and earnings per share estimates. On the other hand, there was a decline in net revenue retention rate, which missed expectations slightly. Customer growth also decelerated and missed. Similarly, revenue guidance for the next quarter was below Consensus, while the full-year guidance was roughly inline. Operating income guidance also came in roughly in line with Consensus. The company touched on its AI capabilities adding that "We're planning to expand the AI-based capabilities in our platform to help our customers unlock new, higher value work." Overall, it was a mixed quarter for the company, with the market likely more focused on the weak guidance.

What is the market telling us:

Smartsheet's shares are very volatile and over the last year have had 45 moves greater than 5%. But moves this big are very rare even for Smartsheet and that is indicating to us that this news had a significant impact on the market's perception of the business.

Smartsheet is up 3.86% since the beginning of the year, but at $40.17 per share it is still trading 22.2% below its 52-week high of $51.66 from June 2023. Investors who bought $1,000 worth of Smartsheet's shares 5 years ago would now be looking at an investment worth $1,460.

Is now the time to buy Smartsheet? Access our full analysis of the earnings results here, it's free.