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As Smartsheet (SMAR) prepares to reveal its quarterly earnings, its proactive steps in expanding services and market presence, coupled with recent significant accomplishments, raise a pivotal question: Does this momentum suggest buying, holding, or selling its stock? Read more to find out…
Enterprise work management platform Smartsheet Inc. (Samar) is scheduled to disclose its earnings for the fourth quarter of fiscal year 2024 on March 14. Analysts expect revenue to grow 20.5% year over year to $255.86 million. Additionally, the company’s EPS for the same period is expected to rise 159% from the prior-year quarter to $0.18.
Furthermore, in its fiscal third-quarter release, SMAR forecast total revenues for Q4 FY2024 of $254-$256 million, projecting growth of 20-21% year-over-year, with non-GAAP operating income of Between $21 million and $23 million and non-GAAP net income per share ranged between $0.17 and $0.19.
For the full fiscal year 2024, the company expects revenue of $955-$957 million, indicating a 25% increase year-over-year, with non-GAAP operating income expected at $82-$84 million and net income per share. Non-GAAP at $0.68. -$0.69.
Mark Mader, CEO of SMAR, said: “We are… Exceeded expectations at the top and bottom of the quarter. Our enterprise customers are working on more robust, more mission-critical solutions on the Smartsheet platform than ever before. We continue to focus on bringing our latest innovations to market so that new and existing customers can take full advantage of our leading enterprise platform.
Furthermore, on January 17, 2024, SMAR announced its investigation $1 billion in annual recurring revenue (ARR) In Q4, this is a significant milestone after being recognized as a leader in the December 2023 Gartner® Magic Quadrant™ for Managing Collaborative Work.
Today, SMAR enables secure and reliable mission-critical operations at scale for many organizations globally, including nearly 85% of the 2023 Fortune 500 companies. Mark commented: “Crossing this financial threshold $1 billion in ARR is meaningful, but at the same time it should be recognized as another milestone along the way.”
SMAR shares have risen 5.3% over the past year, closing the last trading session at $41.85.
Here are the key aspects of SMAR that can influence its price performance in the near term:
The latest developments
On October 23, 2023, SMAR presented its system Latest Smartsheet area in Australia, reinforcing its commitment to enhancing service to its expanding customers in the Asia Pacific and Japan (APJ) region. Distributed globally, Smartsheet Zones facilitate compliance with data residency regulations, giving organizations the flexibility to choose hosting and processing locations.
Smartsheet’s Australian region will serve APJ’s new and existing clients, working across multiple sites to ensure redundancy. The configuration ensures enterprise-level availability and scalability, positioning SMAR for accelerated growth and expansion in the APJ market while enhancing its reputation for reliability and customer-focused solutions.
On September 19, 2023, SMAR presented its system Next generation Smartsheet platform, showcasing new product capabilities that enable advanced solution development, AI-driven data insights, and end-to-end scalability. From setting up healthcare clinics to overseeing acquisitions or executing marketing campaigns with tens of thousands of simultaneous projects, SMAR helps clients handle increasingly complex and mission-critical tasks.
This innovative leap will enhance SMAR’s value proposition, strengthen its competitiveness, attract a broader customer base and promote sustainable growth and market expansion.
Solid finances
During the third quarter of fiscal 2024, which ended October 31, 2023, SMAR’s total revenues increased 23.2% year over year to $245.92 million. Its non-GAAP operating income was $19.36 million, compared to an operating loss of $4.31 million in the prior-year quarter.
Furthermore, the company’s non-GAAP net income and non-GAAP net income per share were $22.59 million, $0.16, compared to P/E of $1.89 million, $0.01. US dollars, respectively, in the prior year period.
Sound historical growth
Over the past three years, SMAR’s revenue has increased at a CAGR of 37.2%. Tangible book value increased at a compound annual growth rate of 3.7% during this period. Moreover, the company’s total assets and Take advantage of free cash flow It increased at a compound annual growth rate of 13.1% and 96.4%, respectively, during the same time frame.
Analysts’ estimates are optimistic
The consensus revenue estimate of $1.14 billion for the fiscal year ending January 2025 reflects a 19.4% increase year over year. Likewise, the company’s EPS for the same period is expected to grow 35.8% from the previous year to reach $0.93. Furthermore, the company topped consensus revenue estimates in all four trailing quarters.
Strong profitability
The stock’s trailing 12-month gross EPS margin and trailing 12-month FCF margin of 79.79% and 26.69% are 62.6% and 197.8% higher than the industry averages of 49.08% and 8.96%, respectively. Moreover, the company’s 12-month asset turnover ratio is 0.82x which is 34.9% higher than the industry average of 0.61x.
POWR’s ratings show sound prospects
SMAR’s positive outlook is reflected in… Energy ratings. The stock has an overall rating of B, which translates to Buy in our rating system. POWR ratings are calculated by taking into account 118 different factors, with each factor weighted to its optimal degree.
Our rating system also evaluates each stock based on eight distinct categories. SMAR carries a growth grade of B, reflecting its strong historical growth performance. Furthermore, the stock received a B quality grade, which is consistent with its impressive profitability metrics.
SMAR is ranked #9 out of 19 under B rating Software – SAS industry. click here To access SMAR assessments of value, momentum, stability and trends.
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SMAR is poised for growth driven by its innovative product capabilities and expansion strategies. The rollout of its Smartsheet region in Australia and the unveiling of its next generation platform demonstrates its commitment to enhancing services and meeting the needs of a broader customer base, positioning the company for rapid expansion in the market.
Additionally, SMAR could make an ideal buy right now given its strong financial performance last quarter, upbeat analyst estimates, and strong profitability metrics. Furthermore, thanks to strong historical growth, SMAR stands out in the software industry, offering the potential for long-term value growth.
How Smartsheet Inc. Outperforms (SMAR) over its counterparts?
While SMAR has an overall score of B, equivalent to a Buy rating, you can check out these stocks with an A (Strong Buy) rating under Software – SAS Industry: DocuSign, Inc. (Doku), Informatica Company (INFA) and Vimeo, Inc. (VMEO). To explore more software – SAAS shares, click here.
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SMAR shares were unchanged in premarket trading Tuesday. Year to date, the SMAR is down -12.48%, versus a 7.57% rise in the benchmark S&P 500 over the same period.
About the author: Aanchal Sugandh
Aanchal’s passion for financial markets drives her work as an investment analyst and journalist. She has a bachelor’s degree in finance and is pursuing the CFA program. She is adept at evaluating the long-term prospects of stocks through her fundamental analysis skills. Its goal is to help investors build portfolios with sustainable returns.
the post Smartsheet Earnings Monitor (SMAR): Is it Time to Buy, Hold or Sell? appeared first on StockNews.com
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