Ping Drops 16% On 4Q Guidance; Analyst Cuts PT

Shares of Ping Identity Holding Corp. are down about 16% in Thursday’s pre-market trading after the software company reported a decline in third-quarter earnings and revenue and provided weak guidance.

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Ping Identity’s (PING) earnings fell 15.4% year-over-year to $0.11 per share. However, EPS came ahead of the Street estimates of $0.02. Revenues of $59.94 million fell 3% year-over-year but surpassed analysts’ expectations of $55.81 million.

Subscription revenues, which account for 92% of the total revenues, came in at $55.1, and were down 4% on a year-over-year basis. Meanwhile, ARR (annual recurring revenue) grew 17% to $242.6 million year-on-year.

As for 4Q, the company expects revenues in the range of $67-70 million, compared to consensus estimates of $68.75 million. ARR is projected in the range of $255 million – $257 million for the fourth quarter, compared to analysts’ forecasts of $256.9 million. (See PING stock analysis on TipRanks).

On Nov. 5, Robert W. Baird analyst Jonathan Ruykhaver lowered the stock’s price target to $29 (3.8% upside potential) from $33 and maintained a Hold rating. He said “While PING did post solid 3Q20 results, ARR guidance came in slightly below consensus at the midpoint and the company clearly continues to see pressure from the macroeconomic environment.”

The analyst added “While durations have begun to normalize, management does continue to see some customers phase in larger deals over a longer time horizon, pressuring near-term growth.” The analyst continues to see “a significant replacement opportunity of legacy IAM [Identity and Access Management] solutions”, despite strong competition in cloud IAM.

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 9 Buys and 4 Holds. The average price target of $33.62 implies upside potential of about 20.3% to current levels. Shares have gained by 15% year-to-date.