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Why Cloudera Stock Sank 24.9% in March

By Keith Noonan – Apr 10, 2019 at 7:36AM

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Cloudera's performance following its merger with Hortonworks is off to a weaker-than-expected start.

What happened

Shares of Cloudera (CLDR) dropped 24.9% in March, according to data from S&P Global Market Intelligence. The cloud services stock fell after the company reported fourth-quarter earnings and issued disappointing guidance.

CLDR Chart

CLDR data by YCharts.

Cloudera published its fourth-quarter and full-year earnings after the market closed on March 13. The company recorded a net loss of $0.15 per share on revenue of $144.5 million, coming in worse than the average analyst estimates for a per-share loss of $0.11. While an earnings miss is never welcome news for shareholders, management's sales guidance for the current quarter and annual period may have been the bigger factor in last month's sell-off.

A cloud icon in front of a person using a mobile phone.

Image source: Getty Images.

So what

For the first quarter, Cloudera expects sales to land between $187 million and $190 million -- up just 4% from the combined revenue for Cloudera and Hortonworks in the prior-year quarter at the midpoint of its target. The company's adjusted net loss for the first quarter is expected to be between $0.22 per share and $0.25 per share. 

Now what

Cloudera stock has regained a bit of ground following March's big sell-off. Shares trade up roughly 6.7% in April as of this writing.

CLDR Chart

CLDR data by YCharts.

Cloudera is valued at roughly $3.1 billion -- or roughly 3.7 times the roughly $845 million in sales it expects to record this year. Prior to the earnings and guidance release in March, analysts had been guiding for the company to generate closer to $930 million in sales -- and Cloudera initially targeted for about $965 million in sales across its first year following the Hortonworks merger.

Keith Noonan 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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