What Happened:
Shares of project management software maker Smartsheet (NYSE:SMAR) jumped 5.4% in the afternoon session after Reuters reported that a group of investors, including private equity firm Vista Equity and Blackstone, are in talks to acquire the company (Smartsheet). According to the sources, a transaction could be signed in the coming weeks if the talks don't fall apart. Vista Equity had a 4.7% stake in Smartsheet as of the end of June 2024. After the initial pop the shares cooled down to $49.34, up 4.2% from previous close.
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What is the market telling us:
Smartsheet’s shares are very volatile and over the last year have had 9 moves greater than 5%. In context of that, today’s move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago, when the stock gained 18.5% on the news that the company reported first-quarter earnings results that narrowly topped analysts' revenue expectations. The bright spot with regard to guidance was that while revenue guidance was in line with expectations, non-GAAP operating profit guidance was well ahead for the next quarter and the full year. This shows that revenue growth is on track, but that growth is much more profitable than anticipated. Overall, this was a solid quarter for Smartsheet.
Smartsheet is up 5.7% since the beginning of the year, and at $49.34 per share it is trading close to its 52-week high of $49.99 from August 2024. Investors who bought $1,000 worth of Smartsheet’s shares 5 years ago would now be looking at an investment worth $1,130.
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