Shares of software-as-a-service specialist Cornerstone OnDemand (CSOD) were slammed on Tuesday following the company's fourth-quarter results.
While Cornerstone's fourth-quarter revenue and non-GAAP (adjusted) earnings per share were better than expected, a soft outlook for first-quarter revenue seems to have raised concerns for analysts and spooked investors.
Cornerstone OnDemand reported fourth-quarter revenue of $149.6 million, up 8.2% year over year. The human capital management software company's non-GAAP earnings per share was $0.43, up from $0.24 in the year-ago quarter. Analysts, on average, were expecting revenue and non-GAAP earnings per share of $146.2 million and $0.34, respectively.
But guidance for revenue between $147 million and $150 million in Q1 was well below analysts' consensus forecast for $157.7 million.
Following the report, one analyst lowered his 12-month price target for the stock but kept a buy rating, and two other analysts downgraded shares from outperform and buy ratings to perform and neutral, respectively.
Cornerstone's first-quarter revenue outlook implies 6% year-over-year revenue growth at the midpoint of the guidance range. Management also said it expects subscription revenue to rise to between $143 million and $145 million, implying 9.7% year-over-year growth at the midpoint.