Smartsheet Posts Better-Than-Feared Quarterly Loss, Sales Outperform

Smartsheet reported a better-than-expected loss in the fiscal fourth quarter (ended Jan. 31) and outpaced analysts’ expectations for revenues. The rise in subscription and professional services revenue was the primary driver.

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However, shares of the software company declined 3.1% in Tuesday’s extended trading session after closing 1.2% higher on the day.

Smartsheet (SMAR) incurred an adjusted loss of $0.04 per share in 4Q, compared to the loss of $0.13 recorded in the prior-year quarter. Analysts had expected the company to report a loss of $0.13 per share.

Total revenue of $109.9 million surged 40% year-over-year and topped analysts’ expectations of $102.72 million. Subscription revenues grew 42% in the quarter, while professional services revenue rose 18%. (See Smartsheet stock analysis on TipRanks)

Smartsheet CEO Mark Mader said, “We look forward to innovating for our customers and providing the leading dynamic platform to empower teams and achieve better business outcomes.”

For the fiscal year 2022, the company anticipates total revenue of $500 million to $505 million, versus the consensus estimate of $488.8 million. Adjusted loss per share is expected to land between $0.44 and $0.36, versus the loss of $0.42 per share estimated by analysts.

For fiscal 1Q, the company projects revenue to be in the range of $111 million to $112 million, versus the consensus estimate of $109 million. Adjusted loss per share is forecasted to be in the range of $0.15 to $0.14, versus analysts’ expectations of a $0.12 loss per share.

Following the 4Q results, Stephens analyst Ryan MacWilliams maintained a Buy rating and a price target of $80 (16.6% upside potential) on the stock as the analyst believes “Smartsheet continues its steady progression back towards pre-COVID levels in its 4Q21.”

MacWilliams remains “positive on Smartsheet as the company invests to take advantage of its opportunity to become the cloud platform for the next-generation knowledge worker.”

Smartsheet shares have exploded 87.5% over the past year, while the stock still scores a Strong Buy consensus rating based on 4 Buys versus 1 Hold. That’s alongside an average analyst price target of $79, which implies 15% upside potential to current levels.

What’s more, Smartsheet scores an 8 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.