Shares of Sumo Logic (SUMO) have bounced back today after falling 18% yesterday following a quarterly earnings report that beat expectations. The sell-off may have been an overreaction, and the stock was up 10% as of 12:20 p.m. EST.
Sumo Logic, a software-as-a-service (SaaS) data analytics specialist, reported revenue of $51.9 million in the fiscal third quarter, ahead of the consensus estimate of $49.1 million. Several analysts adjusted price targets following the results:
- BTIG Research reiterated its buy rating and boosted its price target from $29 to $34.
- J.P. Morgan maintained its neutral rating and increased its price target from $24 to $26.
- Morgan Stanley maintained its equal-weight rating and raised its price target from $26 to $28.
- Cowen increased its price target from $31 to $33.
BTIG analyst Gray Powell suggests that there may have been some confusion around the timing of the release, which occurred during the middle of the day instead of before or after market hours. Powell brushed aside the "messy optics" of the release and instead pointed to the strong results. This was Sumo Logic's first earnings release as a public company.
Powell also liked Sumo Logic's outlook for the fourth quarter, which calls for revenue of $52 million at the midpoint, compared to the consensus estimate of $51 million. The forecast shows that the company's billings growth is starting to reaccelerate after hitting a speed bump earlier this year due to the pandemic, according to BTIG.
Cowen attributed the rebound in billings to enterprise strength, improved sales productivity, and expanding relationships with channel partners.