Qualtrics International Beats Q3 Expectations and Raises FY2021 Outlook

Qualtrics International (XM) reported stronger-than-expected Q3 results, topping both earnings and revenue estimates. The company also raised its FY2021 guidance above analyst expectations.

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Shares of the provider of experience management solutions to enterprises rose almost 4% on Thursday to close at $45.97. (See Qualtrics stock charts on TipRanks)

Adjusted earnings of $0.01 per share beat analysts’ expectations of a loss of $0.02 per share. The company reported breakeven results in the prior-year period.

Markedly, revenues jumped 41% year-over-year to $271.6 million and exceeded consensus estimates of $258.2 million. The increase in revenues reflected a surge in subscription revenue, which increased 49% to $220.3 million.

Based on the robust Q3 results, management raised its financial guidance for FY2021. The company now forecasts adjusted earnings in the range of $0.02 – $0.04 per share, while the consensus estimate is pegged at a loss of $0.01 per share. Revenues are forecast to be in the range of $1.056 – 1.058 billion, versus the consensus estimate of $1.01 billion.

For the fourth quarter, an adjusted loss is likely to range between $0.02 and $0.04 per share, while the consensus estimate is pegged at a loss of $0.04 per share. Revenues are projected to be in the range of $296 – 298 million compared to the consensus of $263.8 million.

Qualtrics CEO Zig Serafin commented, “Companies in every industry are accelerating their experience transformations, and they’re increasingly choosing Qualtrics to build critical relationships with their customers and employees.”

Following the robust Q3 results, Deutsche Bank analyst Patrick Colville increased the price target on Qualtrics to $48 (4.4% upside potential) from $45 and maintained a Buy rating. Impressed by the quarterly beat, Colville commented that Qualtrics “continues to fire on all cylinders.”

Consensus among analysts is a Strong Buy based on 10 Buys and 3 Holds. The average Qualtrics price target of $53.25 implies 15.8% upside potential to current levels.