Shares of Smartsheet stock (NYSE:SMAR) cratered nearly 20% in extended trading yesterday after the company reported a conservative outlook for Fiscal 2024. Smartsheet projected calculated billings for FY24 to grow by 20%, much lower than historical rates. Also, annualized contract values (ACV) of more than $5,000 are expected to increase by 16% in Q2FY24, signifying a fall both from the previous quarter and from the same quarter last year.
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Smartsheet provides a cloud-based platform for work management. Following the results, President and CEO Mark Mader cited “strong demand” from enterprise customers and mentioned platform features based on artificial intelligence “to help our customers unlock new, higher value work.” Even so, shareholders seemed disheartened by the conservative outlook for billings and sales.
SMAR Q1 Earnings Results in Detail
For the first quarter of Fiscal 2024, Smartsheet posted adjusted earnings of $0.18 per share, easily beating analyst estimates of $0.08 per share and improving significantly over last year’s loss of $0.18 per share.
Similarly, revenue of $219.9 million surpassed the analyst consensus of $214.12 million. What’s more, revenue in Q1 grew an impressive 30.7% compared to the prior year period thanks to a 33% year-over-year growth in Subscription revenue.
SMAR EPS and Revenue Outlook
For Q2FY24, Smartsheet expects adjusted earnings between $0.07 and $0.08 per share. Total revenue is pegged between $228 million and $231 million, showing a growth rate of 22% to 24%.
At the same time, adjusted earnings for FY24 are forecasted between $0.37 to $0.44 per share, and full-year revenue is pegged between $943 million to $948 million. Also, free cash flow is projected to reach $110 million in FY24.
What is the Price Target for SMAR?
Following the Q1 print, analyst David Hynes of Canaccord Genuity reiterated a Buy rating and price target of $50 (2% upside potential) on SMAR stock.
On TipRanks, SMAR commands a Strong Buy consensus rating based on 11 Buys and two Hold ratings. Further, the average Smartsheet price target of $53.08 implies 8.3% upside potential from current levels. Significantly, SMAR stock has already gained 26.1% so far in 2023.
