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Why Coronavirus Stock Everbridge Skyrocketed 31% in May

By Beth McKenna – Jun 6, 2020 at 2:12PM

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Shares of the software company are riding a tailwind from the COVID-19 pandemic.

What happened

Everbridge (EVBG 5.60%) stock surged 31.3% in May, according to data from S&P Global Market Intelligence. For context, the S&P 500 returned 4.8% last month.

Shares of the critical event management (CEM) platform operator gave back some of those gains during the first week of June. This week, the stock dropped 15.3%, while the broader market was up nearly 5%.

Nonetheless, Everbridge stock remains a big winner in 2020. It's up 58.7% through June 5, while the market is flat.

Several employees monitoring screens in a dark control room.

Image source: Everbridge.

So what

We can attribute Everbridge stock's powerful performance last month to the company's May 5 release of first-quarter results that delighted investors. Shares popped nearly 24% the next day and ran up more than 31% in the two-day period following the release.

In Q1, revenue rose 38% year over year to $58.9 million, beating the $57.7 million Wall Street consensus estimate. Adjusted for one-time items, net loss was $5.5 million compared with $3.5 million in the year-ago period, which translated to the loss per share widening 45% to $0.16. That result crushed the consensus expectation, which was a loss per share of $0.38.

Everbridge's net loss widened year over year because it's investing in growth initiatives, which is common for tech companies that are relatively newly public. (Everbridge held its initial public offering, or IPO, in the fall of 2016.) These initiatives included the launch of several COVID-19 pandemic-related CEM solutions.

Now what

Management raised full-year guidance, thanks to its optimism about the remainder of the year and Everbridge's strong start to 2020. 

In 2020, management guided for revenue of $261.5 million to $263.3 million, representing growth of 30% to 31% year over year. The prior guidance was for revenue of $260.3 million to $262.3 million.

Management also significantly improved its bottom-line outlook. On an adjusted basis, the company is now expected to lose $0.19 to $0.16 per share. This represents the loss per share narrowing 10% to 24% year over year. The prior guidance was for a loss per share of $0.77 to $0.75.

Beth McKenna has no position in any of the stocks mentioned. The Motley Fool owns shares of Everbridge. The Motley Fool has a disclosure policy.

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