Please ensure Javascript is enabled for purposes of website accessibility

Why Anaplan Shares Are Soaring Today

By Anders Bylund – Aug 26, 2020 at 12:59PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The business-planning software specialist posted solid results in the second quarter and pointed to continued success in the back half of the year.

What happened

Shares of Anaplan (PLAN) soared as much as 30.4% higher on Wednesday morning, following a strong second-quarter earnings report.

So what

Anaplan's sales rose 26% year over year to $106.5 million. Adjusted bottom-line losses decreased from $0.12 to $0.04 per diluted share. Your average analyst had expected a net loss of $0.12 per share on revenues near $103.5 million.

The provider of cloud-based business planning tools and services also set a third-quarter revenue target at approximately $110 million, well ahead of the Street consensus at $108 million.

A dollar bill folded into an arrow pointing up, origami-style.

Image source: Getty Images.

Now what

Anaplan saw a strong interest in its business planning services from large enterprises during the COVID-19 health crisis. In the earnings call, CEO Frank Calderoni highlighted big contract wins with massive companies in the retail, healthcare, and technology sectors.

"What stands out to me is the rapid change that the global pandemic has forced upon businesses. This endless pace of change has become unrelenting, and the need for a connected platform is playing out," Calderoni said. "Customers are choosing us because of the value that they see in the platform."

We're looking at a classic growth stock here, exploring a large target market under highly qualified leadership. Don't forget that Calderoni served as the CFO of networking giant Cisco Systems (CSCO -0.54%) for more than a decade before steering open-source software veteran Red Hat into a $34 billion buyout by IBM (IBM -0.33%). This guy sure knows his way around enterprise-class business deals.

The stock is nearly back to February's all-time highs again, having posted a 137% bounce from the market bottom in March.

Anders Bylund owns shares of IBM. The Motley Fool owns shares of and recommends Anaplan Inc. The Motley Fool has a disclosure policy.

Stocks Mentioned

Anaplan Inc Stock Quote
Anaplan Inc
PLAN
International Business Machines Stock Quote
International Business Machines
IBM
$148.67 (-0.33%) $0.49
Cisco Systems Stock Quote
Cisco Systems
CSCO
$49.70 (-0.54%) $0.27

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.