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Why Alteryx Stock Gained 27% in May

By Jeremy Bowman - Jun 1, 2020 at 6:58PM

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An analyst upgrade and a broader recovery helped lift the stock.

What happened

Shares of Alteryx (AYX -0.13%) were climbing again last month as the cloud-based data analytics provider continued to rebound from the stock market crash in March. Alteryx shares actually pulled back briefly after the company's first-quarter earnings report, but rallied later in the month with the help of an analyst upgrade and broader gains among SaaS (software-as-a-service) stocks. According to data from S&P Global Market Intelligence, Alteryx finished last month up 27%.

A businessman looks at charts on monitors and on his desk

Image source: Getty Images.

So what

Shares actually fell modestly, slipping 3%, on May 7 after the data analytics specialist turned in its first-quarter report. Alteryx turned in a solid quarter, with revenue jumping 43% to $108.8 million on a dollar-based net expansion rate of 128%, meaning existing customers from a year ago hiked their spending by 28%. Spending on operating expenses like sales and marketing as well as research and development was up substantially. Alteryx posted an adjusted loss of $0.10 per share, down from a profit of $0.04 per share a year ago. Analysts had expected a loss of $0.09 per share. 

Nonetheless, CEO Dean Stoecker noted "an abrupt and significant change in customer buying behavior late in the quarter," and the company called for much slower revenue growth in the second quarter at just 10% to 15% due to the impact of the COVID-19 pandemic, though Alteryx's guidance has historically been conservative.

Later in the month, Alteryx jumped on an analyst upgrade, rising 7% on May 19 after Piper Sandler analyst Brent Bracelin upgraded the stock from neutral to overweight and raised his price target from $90 to $160. Bracelin said that job postings as well as conversations with executives in the subsector led him to believe that adoption for data analytics platforms would accelerate in 2021 and 2022, showing that Alteryx should be able to overcome the current crisis. 

Now what

Cloud stocks have generally surged over the last couple of months, as investors believe the sector is relatively protected from the pandemic. Though Alteryx expects some growth headwinds due to the uncertainty, Stoecker also said on the earnings call that the crisis is also a reminder of how valuable data analytics is, and said that some customers had accelerated deployments with the company.

Alteryx stock is still down about 20% from its all-time high, meaning there's more room for growth if the momentum in SaaS stocks continues. Over the long term, Alteryx's growth opportunity is still very much intact.

 

Jeremy Bowman owns shares of Alteryx. The Motley Fool owns shares of and recommends Alteryx. The Motley Fool has a disclosure policy.

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