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Why Alteryx Stock Was Tumbling Again Today

By Jeremy Bowman - Feb 10, 2021 at 12:06PM

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Shares of the data analytics company dipped as it offered weak guidance for 2021.

What happened

Alteryx (AYX -4.68%) shares were heading lower today after the data analytics provider once again gave disappointing guidance in its quarterly earnings report. Though the company beat analyst estimates in the fourth quarter, the market soured on its 2021 outlook.

As a result, the stock was down 13.8% as of 10:32 a.m. EST.

A business man looks at charts on several monitors and on paper

Image source: Getty Images.

So what

In the fourth quarter, revenue ticked up 3% to $160.5 million, which was ahead of the company's own guidance and the analyst consensus at $152.7 million. Alteryx, which provides data analytics software both through the cloud and on-premise, has seen its revenue growth decelerate sharply over the last year due partly to the way new accounting rules measure cloud sales, and partly because of the pandemic, which has made on-premise sales more difficult and lengthened sales cycles.

Annual recurring revenue rose 32% to $492.6 million, showing the core business growth remains solid, and customers grew 16% to 7,083 over the last year. In the fourth quarter, it added 128 net new customers, a sign customer growth is decelerating. Net expansion rate was 122%, showing existing customers increased their spending with Alteryx by 22%.

Further down the income statement, margins were similar to the quarter a year ago as adjusted operating income fell slightly from $51 million to $49.2 million. On the bottom line, adjusted earnings per share was down from $0.64 to $0.62 but easily beat analyst estimates at $0.31. Due to budgeting cycles, the fourth quarter is Alteryx's strongest in revenue and profitabiity.

"We expect 2021 will be a year of transformation for Alteryx," new CEO Mark Anderson said. "As our customers continue their transformation initiatives, we intend to scale our product, operations, and customer focus and deliver significant business value through the power of analytics and automation."

Now what

Despite beating the analyst mark in the quarter, the cloud stock's guidance left something to be desired. For 2021, the company expects revenue of $555 million to $565 million, representing a 13% increase from 2020, which was below the analyst consensus at $567.2 million. For annual recurring revenue, it expects $625 million, up 27% from 2020, and on the bottom line, it sees a per-share result between a loss of $0.07 and a profit of $0.07, much worse than analyst expectations of $0.73.

First-quarter guidance also underwhelmed as Anderson noted a weak macro environment and a shortening of sales contracts on the earnings call. The shortening of contracts will impact revenue growth, though it doesn't necessarily hurt the underlying business.

Considering the 2021 forecast, it's easy to see why the stock is down, but there are reasons to believe that Alteryx's business is healthier than the guidance would indicate.

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