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Why Cloudera Stock Tumbled Today

By Timothy Green – Jun 4, 2020 at 1:34PM

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Weak guidance overshadowed a solid report.

What happened

Shares of Cloudera (CLDR) sank on Thursday after the cloud software company reported its first-quarter results. While revenue and earnings beat analyst expectations, guidance came in below estimates. The stock was down 11.1% at 2 p.m. EDT.

So what

Cloudera reported first-quarter revenue of $210.5 million, up 12% year over year and $5.9 million higher than the average analyst estimate. Subscription revenue grew at a quicker 21% pace, reaching $187.1 million.

Concept art representing an electronic cloud.

Image source: Getty Images.

Non-GAAP (adjusted) earnings per share came in at $0.05, up from a loss of $0.13 in the prior-year period and $0.04 better than analysts were expecting. Cloudera lost $0.20 per share on a GAAP basis, an improvement over its $0.38-per-share loss in the first quarter of last year.

"We executed extremely well in Q1, particularly as the pandemic was in full effect for more than half of our fiscal quarter," said Cloudera CEO Rob Bearden.

Now what

While Cloudera beat estimates for its first-quarter results, the company's guidance failed to impress. For the second quarter, the company predicts revenue between $206 million and $209 million and non-GAAP EPS between $0.06 and $0.07. At the midpoint, that revenue guidance range represents year-over-year growth of just 5.5%. Analysts were expecting revenue guidance of $212.3 million.

For the full year, Cloudera sees revenue between $825 million and $845 million, up from $794 million in fiscal 2020 and well short of the $860.3 million analyst consensus. Non-GAAP EPS is expected to be between $0.26 and $0.30.

Shares of Cloudera had surpassed their prepandemic peak prior to the earnings report. With growth set to slow, investors might be reassessing their optimism regarding the stock.

Timothy Green 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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