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Why Talend Stock Crashed Today

By Timothy Green – Nov 8, 2018 at 1:00PM

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Investors recoiled at what looks like a positive quarterly report.

What happened

Shares of Talend (TLND) tumbled on Thursday after the cloud and big data integration solutions provider reported its third-quarter results. Despite the company beating analyst estimates for both revenue and earnings, the stock was down about 35.8% at 12:15 p.m. EST.

So what

Talend reported third-quarter revenue of $52.1 million, up 36% year over year and slightly higher than the average analyst estimate. That growth rate includes a benefit from the switchover to the IFRS 15 revenue recognition standard, as the company did not restate previous results. Subscription revenue was $44.6 million, also up 36% year over year.

A man with his head on a table in front of a declining chart.

Image source: Getty Images.

Talend reported a non-IFRS net loss of $0.09 per share, up from a loss of $0.11 per share in the prior-year period and $0.01 better than analysts were expecting. The company lost $0.31 per share on an IFRS basis, down from a loss of $0.18 per share in the prior-year period.

Talend boosted its total customer count above 2,000 during the third quarter, and its cloud subscription business more than doubled on a year-over-year basis for the ninth straight quarter.

Now what

Talend expects fourth-quarter revenue between $56.6 million and $57.4 million, along with a non-IFRS net loss per share between $0.12 and $0.16. Those ranges compare to revenue of $41.5 million and a non-IFRS net loss per share of $0.28 in the fourth quarter of 2017. The midpoint of Talend's revenue guidance range implies year-over-year growth of about 37%.

Even with positive results and solid guidance, Talend stock crashed on Thursday. Valuation may be playing a role -- the stock traded around 10 times trailing-12-month sales prior to the third-quarter report. Expectations may have simply gotten out ahead of what the company could deliver.

Timothy Green has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Talend. The Motley Fool has a disclosure policy.

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