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Why Talend Stock Fell 43.9% in November

By Keith Noonan – Dec 11, 2018 at 5:40PM

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The cloud-and-data-services company reported solid third-quarter results, but investors crushed the stock last month.

What happened

Shares of Talend (TLND) dipped 43.9% in November, according to data provided by S&P Global Market Intelligence. The stock plummeted after the cloud-and-data-services company reported third-quarter results that were better than expected, paired with disappointing guidance and a new acquisitions move.

TLND Chart

TLND data by YCharts.

Talend reported third-quarter results on Nov. 7, with sales climbing 36% year over year to reach roughly $52.1 million. The company's adjusted losses for the period came in at $0.09 per share, beating the average analyst estimate's call for a loss of $0.10, but fourth-quarter targets and comments from management seem to have sent the stock tumbling. 

Cloud icons and email icons.

Image source: Getty Images.

So what

Talend expects its fourth-quarter losses to come in between $0.12 and $0.16 per share, while the average analyst estimate had guided for a $0.09 loss prior to the recent earnings release. Revenue for the current quarter is expected to be between $56.6 million and $57.4 million, which also fell short of the average analyst target.

Management stated that demand for its on-premise data management solutions is declining, particularly among new customers, so investors may be looking at that trend as an obstacle to future growth. News that Talend had acquired Stitch, a data-integration software company, at a $60 million price may also have been a factor in the big sell-off. 

Now what

Talend stock has regained some ground in December, trading up roughly 10.7% in the month so far despite sell-offs for the broader technology sector.

TLND Chart

TLND data by YCharts.

The positive movement this month appears to be a reaction to the dramatic sell-offs in November, as there doesn't seem to have been any big news to prompt the gains. While declines for Talend's on-premise data management solutions aren't encouraging, the company still posted solid growth last quarter -- with a 71% year-over-year increase for cloud and big-data solutions subscription revenue being particularly impressive. The company has a market cap of roughly $1.15 billion and trades at roughly 5.6 times this year's expected sales.

Keith Noonan 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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