Please ensure Javascript is enabled for purposes of website accessibility

Why Mimecast Stock Jumped 13.2% Tuesday

By Daniel Sparks – Updated Apr 25, 2019 at 12:14AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Strong quarterly results and a robust outlook from management have investors looking up.

What happened

Shares of Mimecast (MIME) popped on Tuesday, rising as much as 20.6%. As of 1:15 p.m. EST today, the stock was up 13.2%.

Shares of the email and data security company were up because of the company's fiscal third-quarter earnings release, which featured better-than-expected revenue and adjusted earnings per share.

A chart showing a stock price moving higher

Image source: Getty Images.

So what

For its third quarter of fiscal 2019, Mimecast reported revenue of $87.6 million, up 30% year over year. Non-GAAP earnings per share were $0.09, up from $0.03 in the year-ago period. On average, analysts were expecting revenue of about $84.8 million and non-GAAP earnings per share of $0.06. 

And it's important to note that free cash flow of $10.8 million during the quarter was a big jump from the $4.5 million generated in the year-ago quarter.

The results were driven by new customer acquisition, increased adoption of the company's expanded offerings, and record customer retention, management said in Mimecast's third-quarter earnings release.

Check out the latest Mimecast earnings call transcript.

Now what

For its current quarter, management said it expects revenue between $90.6 million and $91.5 million. This is above a consensus analyst forecast for revenue of $87.8 million during the period.

Looking to fiscal 2020, management said it expects revenue between $413 million and $427 million, easily higher than analysts' average forecast of approximately $405 million in revenue during the period.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of Mimecast. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Mimecast Stock Quote

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.