{"id":20368,"date":"2023-06-09T05:51:04","date_gmt":"2023-06-09T09:51:04","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/smartsheets-stock-logs-worst-day-in-3-years-as-effects-of-soft-business-spending-show-up-in-outlook\/"},"modified":"2023-06-09T05:51:05","modified_gmt":"2023-06-09T09:51:05","slug":"smartsheets-stock-logs-worst-day-in-3-years-as-effects-of-soft-business-spending-show-up-in-outlook","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=20368","title":{"rendered":"Smartsheet\u2019s stock logs worst day in 3 years as effects of soft business spending show up in outlook"},"content":{"rendered":"
\n

Smartsheet Inc. shares turned in their worst day in three years after Wall Street acknowledged that the soft business spending environment had finally caught up with the cloud-based work-management platform provider. <\/p>\n

Smartsheet
\n SMAR,
\n -17.47%<\/bg-quote>
\n shares fell as much as 21% to an intraday low of $38.58, and finished down 17. 5% at $40.44, their worst-performing day in three years, since June 4, 2020, when shares dropped 23%. Smartsheet went public in April 2018.<\/p>\n

\n

Smartsheet shares are up 2.7% for the year, compared with an 11.8% advance by the S&P 500
\n SPX,
\n +0.62%<\/bg-quote>
\n and a 26.5% gain by the Nasdaq Composite
\n COMP,
\n +1.02%<\/bg-quote>.<\/span>
\n Meanwhile, the iShares Expanded Tech-Software Sector exchange-traded fund
\n IGV,
\n +1.33%<\/bg-quote>
\n and the First Trust Cloud Computing ETF
\n SKYY,
\n +0.37%<\/bg-quote>
\n are both up about 28% year to date.<\/p>\n

Late Wednesday, Smartsheet\u2019s otherwise strong earnings report was marred by a billings miss and a free-cash-flow (FCF) outlook for the year that fell short of the Wall Street consensus at the time. Last quarter, the company issued a \u201cconservative\u201d outlook amid a tough business spending environment.<\/p>\n

Guggenheim analyst John DiFucci, who has a buy rating and a $57 price target on the stock, said soft small-to-midsize business transactions and elongated sales cycles were the main culprits in Smartsheet\u2019s report.<\/p>\n

\u201cThe company is seeing effects of a soft macro backdrop, albeit later than most others in our coverage universe who have been seeing new business declines for most of 2022,\u201d DiFucci said.<\/p>\n

Read: <\/strong> Zscaler results, outlook top Street view, but shares dip amid tough cloud-software environment<\/p>\n

\u201cThe bottom line here is the macro softness is something everyone is dealing with, but there is nothing in Smartsheet\u2019s model that would preclude it from achieving the long-term FCF characteristics we would expect from most software companies with scale and maturity,\u201d DiFucci said. \u201cWe believe it\u2019s facing a tremendous greenfield opportunity and stands as the most enterprise ready solution in the class.\u201d<\/p>\n

Read: <\/strong>SentinelOne stock plummets 35% on record volume for worst one-day drop ever<\/p>\n

D.A. Davidson analyst Robert Simmons, who has a buy rating and a $57 price target, also pointed to the macro weakness despite the strong results for the quarter, but he was a little more cautiously optimistic.<\/p>\n

\u201cMacro is impacting the company in multiple ways, with [small-to-midsize business]\/mid-market weaker and longer sales cycles upmarket, but growth remained above 30%, and the company is delivering upside to margins; we see little downside to current numbers, though the degree of upside is difficult to gauge,\u201d Simmons said in a note Thursday.<\/p>\n

Read: <\/strong>MongoDB stock surges 28% for best day ever on big beat, forecast<\/p>\n

Oppenheimer analyst George Iwanyc, who has an outperform rating and a $55 price target, said that while the company beat FCF estimates for the quarter, the outlook would weigh on the stock.<\/p>\n

\u201cManagement remains cautious with respect to macro pressures and lengthening deal cycles, providing unchanged [fiscal year 2024] revenue and billings guidance that could disappoint investors,\u201d Iwanyc said.<\/p>\n

Of the 21 analysts who cover Smartsheet, 17 have buy ratings and four have hold ratings, along with an average price target of $52, according to FactSet data.<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Smartsheet Inc. shares turned in their worst day in three years after Wall Street acknowledged that the soft business spending environment had finally caught up with the cloud-based work-management platform provider. Smartsheet SMAR, -17.47% shares fell as much as 21% to an intraday low of $38.58, and finished down 17. 5% at $40.44, their worst-performing […]<\/p>\n","protected":false},"author":1,"featured_media":20369,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-20368","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nSmartsheet\u2019s stock logs worst day in 3 years as effects of soft business spending show up in outlook | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Smartsheet Inc. shares turned in their worst day in three years after Wall Street acknowledged that the soft business spending environment had finally\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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