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Why Veritone Inc. Stock Plunged More Than 20% Lower Today

By Anders Bylund – Updated Aug 14, 2018 at 4:07PM

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The artificial intelligence expert more than doubled several key metrics in the second quarter, but still fell short of analysts' expectations. That's life in the fast (and small, and lumpy) lane.

What happened

Shares of Veritone (VERI -5.84%) fell as much as 25% lower on Tuesday due to a disappointing second-quarter earnings report that was published the night before. By 3:30 p.m. EDT, the stock had recovered only slightly to a 22.4% drop, compared to Monday's closing prices.

So what

The provider of artificial intelligence tools designed to help other companies analyze and organize unstructured data such as audio, video, and image content saw revenues rising 14% year over year to land at $4.2 million. Adjusted net losses shrank 33% to $0.88 per diluted share. These positive trends were not enough to match Wall Street's expectations, where net losses had been targeted at an even smaller $0.85 per share to something like $4.9 million in top-line revenues.

Robot hand pushing keys on a laptop, whose screen is showing a melange of charts and trend lines.

Image source: Getty Images.

Now what

Veritone more than doubled its customer counts, software-as-a-service sales, and hours of multimedia content processed over the year-ago period. In other words, there's nothing wrong with Veritone's business development. It's just hard to pin down exact financial targets for a small company with lumpy results and generally rampant revenue growth -- or to work out a reasonable market value for these high-flying bottle rockets.

But don't cry for Veritone investors. Even after today's sudden haircut, the stock is still trading 48% higher over the last 52 weeks. This will just continue to be a highly volatile stock for many quarters and years to come.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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