What happened

Sierra Wireless's (NASDAQ:SWIR) share price has tumbled 17% since the beginning of this year, according to data provided by S&P Global Market Intelligence. The huge drop-off happened at the very beginning of the year, after the company's management forecast earnings that were far below analysts' consensus estimate.

What happened

Sierra's shares have had a few dips and pops so far this year. But as you can see from the chart below, the biggest drop came in February and the share price hasn't recovered:

SWIR ChartImage source: YCharts.

Sierra's fourth-quarter 2017 results weren't bad. Revenue grew by 12.6% to $163 million. Non-GAAP (generally accepted accounting principles) net income was $9.2 million, or $0.28 per share, which was up from $8.8 million, or $0.27 per share, in the year-ago quarter.

The problem was that Sierra's management forecast first-quarter earnings that were far below analysts' expectations. The company's management said that one-time costs would hurt Sierra's first-quarter sales, and that its adjusted earnings per share would be in the range of $0.04 to $0.10 -- while the analysts' consensus estimate was around $0.20 per share.

Once the share price fell at the beginning of the year, it never bounced back. Even the company's solid first-quarter sales growth in May wasn't enough to boost investor sentiment.

Chalkboard with a chart depicting a quantity falling over time

Image source: Getty Images.

Now what

Sierra's stock has jumped about 5% so far this month. But the company's relatively small market cap and its early bet on the burgeoning Internet of Things market mean that investors can likely expect more short-term volatility from Sierra Wireless.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Sierra Wireless. The Motley Fool has a disclosure policy.