Why Shares of Solazyme Inc. Plunged Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Solazyme Inc (NASDAQ: SZYM  ) fell as much as 10.6% today after the company reported first-quarter earnings.

So what: Revenue was up 85% to $12.4 million but net loss increased from $26.5 million a year ago to $34.7 million last quarter. Even on a non-GAAP basis, the loss of $30.5 million equated to $0.44 per share, which was much higher than the $0.33 loss analysts expected.

Now what: Solazyme has long been a company with a lot of promise, and management pointed to progress in Clinton/Galva, the encapsulated lubricant Encapso, and Algenist. But Solazyme isn't anywhere close to leading to a profit, and analysts have high expectations for the company this year and next. Analysts have estimated revenue of $115.2 million in 2014 and $330.4 million next year, so Solazyme needs to pick up production to keep investors happy, something it clearly didn't do fast enough in the first quarter.

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  • Report this Comment On May 07, 2014, at 3:43 PM, TMFBlacknGold wrote:

    I think most of the weakness post earnings stems from the delay at Moema (the 100,000 MT per year facility being commissioned in Brazil). Revenue and EPS misses/beats don't matter at this point.

    Maxxwell

  • Report this Comment On May 13, 2014, at 2:13 PM, Whamo wrote:

    I got into this stock today, perhaps I'm a little early, but I look forward to better days.

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