Smartsheet Slips After-Hours Despite Exceeding Q2 Expectations

Smartsheet Inc. (SMAR), a developer of cloud-based work management platforms, reported better-than-expected second-quarter results on Tuesday. Shares slipped 3.4% following the results in the after-hours trading session on September 7.

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The company reported an adjusted quarterly loss of $0.05 per share, better than the Street’s estimated loss of $0.13 per share. In the year-ago period, Smartsheet had posted a loss of $0.06 per share. (See Smartsheet stock charts on TipRanks)

Additionally, total revenue grew 44% year-over-year to $131.74 million, surpassing analysts’ estimates of $125.51 million. Compared to the prior-year quarter, Smartsheet’s subscription revenue grew 45% to $121.1 million, and quarterly calculated billings increased 47% to $142.9 million.

Mark Mader, president and CEO of the company, said, “Across the globe, customers choose Smartsheet to manage programs at scale, automate workflows across systems, and rapidly configure no-code solutions. Looking ahead, we’re committed to continue innovating with our customers to create new, more powerful ways of working in a hybrid world.”

Based on its solid second-quarter results, SMAR projected third-quarter revenue and adjusted loss to be in the range of $138 million to $139 million, and $0.12 to $0.10 per share, respectively.

Moreover, for Fiscal 2022, Smartsheet forecasts revenue to fall in the range of $530 million to $533 million, compared to the consensus of $514 million. Additionally, the company expects full-year loss to be in the range of $0.44 to $0.36 per share, versus analysts’ estimated loss of $0.39 per share.

In anticipation of strong demand trends driving Smartsheet’s Q2 results ahead of estimates, Needham analyst Scott Berg recently reiterated a Buy rating on the stock with a price target of $80, implying 3.3% downside potential to current levels.

Overall, the stock commands a Strong Buy consensus rating, based on four Buys and one Hold. The average Smartsheet price target of $75.25 implies 9.1% downside potential to current levels. Shares have gained 72.3% over the past year.