Shares of "mobile capture and digital identity verification" company Mitek Systems (NASDAQ:MITK) crashed after reporting (actually pretty decent) fourth-quarter 2019 earnings last night. As of 3:10 p.m. EST, the stock was down a whopping 16%.
Analysts had expected Mitek to report earnings of only $0.18 per share (pro forma) on sales of $25.01 million for its fiscal third quarter. Mitek beat that on both counts (if only just barely on sales), earning $0.21 per share on sales of $25.02 million.
So what's wrong with that? More precisely, what's 16 percentage points wrong with that?
Well, for one thing, when calculated according to generally accepted accounting principles (GAAP), Mitek's earnings weren't nearly as strong as the pro forma numbers noted above. Actual GAAP profits were only $0.08 per share. Then again, when you consider that a year ago, Mitek was losing money, even $0.08 per share in profit is a pretty nice change.
Sales growth was pretty nice as well -- up 19% year over year. Yes, that was a steep falloff from the company's total sales growth of 33% for the year, but it wasn't any worse than analysts had predicted. All in all, CEO Max Carnecchia described his company's results as "another outstanding fiscal year for Mitek."
About the worst I can say about Mitek's performance is that growth seems to be slowing from where it was earlier in the year, and that it looks likely to continue slowing in the year ahead. Management forecast 16% to 21% sales growth, to somewhere between $98 million and $102 million in sales next year. That's in line with analyst estimates -- but perhaps it's simply not fast enough to satisfy growth investors.