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Why Alteryx Stock Was Falling Today

By Jeremy Bowman - Jan 4, 2021 at 2:31PM

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Shares of the analytics specialist pulled back after it offered disappointing fourth-quarter guidance.

What happened

Shares of Alteryx ( AYX 1.25% ) were pulling back Monday after the provider of data analytics software updated its fourth-quarter guidance to reflect its anticipated flat revenues. It also announced the hiring of a new chief revenue officer.

As a result, the stock was down by 8.9% as of 2:18 p.m. EST.

A businessman looking at several charts on computer monitors.

Image source: Getty Images.

So what

In a press release Monday morning, Alteryx said it now expects fourth-quarter revenue to be between $155 million and $158 million, more or less in line with the $156.6 million in revenue it booked a year prior. That forecast was better than its November guidance range of $146 million to $150 million, but investors may have been expecting more as its third-quarter results were much stronger than guidance.

What was also concerning is that management trimmed its annual recurring revenue (ARR) guidance for the full year to a range of $492 million to $495 million, up by 32% to 33%, compared to a previous forecast at $500 million. In some ways, ARR is a better indicator of the company's performance than generally accepted accounting principles (GAAP) revenue, as GAAP revenue is affected by the timing of bookings and whether they are for on-premise computing or cloud computing.

Separately, the company said it had hired Dean Darwin to be its new chief revenue officer. Like new CEO Mark Thompson, Darwin comes from cybersecurity firm Palo Alto Networks, and will lead Alteryx's global go-to-market strategy and drive its next phase of growth.

Now what

2020 was a chaotic year for Alteryx as the stock swung up and down multiple times, plunging first in March amid the broad market crash, then again in August after it badly missed second-quarter estimates, and again in November on weak fourth-quarter guidance. The year also included the surprise exit of founder and CEO Dean Stoecker, who stepped down in October and was replaced by Anderson, though Stoecker will remain as executive chairman.

The year ahead is liable to be volatile, too. Alteryx was growing rapidly before the pandemic hit, but its business was clearly upended by the crisis, and its numbers look even worse because of the way cloud sales are now recorded. Whether the company can get back on track remains to be seen, but there is certainly upside potential for investors if it can approach its prior growth rate. Expect to learn more when the company gives its full fourth-quarter earnings report in February.

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Stocks Mentioned

Alteryx Stock Quote
Alteryx
AYX
$66.47 (1.25%) $0.82
Palo Alto Networks, Inc. Stock Quote
Palo Alto Networks, Inc.
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