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Why Alteryx Stock Lost 24% Last Month

By Jeremy Bowman - Mar 3, 2021 at 10:52AM

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Shares of the data analytics specialist pulled back on weak guidance for 2021.

What happened

Shares of Alteryx (AYX -4.68%) were moving backward last month as the data analytics company offered disappointing guidance for 2021 and, toward the end of the month, announced the sudden departure of its chief revenue officer, who had been hired only weeks earlier.

According to data from S&P Global Market Intelligence, the stock finished February down 24%.

A business man looking at several charts on computer monitors and on paper

Image source: Getty Images.

As you can see from the chart below, the stock tumbled when Alteryx's earnings report came out and continued to decline through the rest of the month.

AYX Chart

AYX data by YCharts

So what

Alteryx stock gained through the first week of February as it rode a broader wave of growth in tech stocks, but then plunged 16% on Feb. 10 as its earnings report came out. The company had preannounced the results back in January, but investors seemed particularly disappointed by guidance for 2021.

It actually beat estimates for the fourth quarter although revenue growth slowed to just 3%, in part due to the impact of new accounting rules that delay revenue recognition. Annual recurring revenue increased 32% to $492.6 million, a more encouraging sign. 

Looking ahead, the company sees revenue of just $104 million to $107 million for the first quarter, implying a decline of 1.6% to 4.4%, and for the full year, it's calling for revenue of $555 million to $565 million, an increase of just 13%. Both forecasts were below what analysts were expecting.  

New CEO Mark Anderson said, "We expect 2021 will be a year of transformation for Alteryx," implying that the company has to work to reclaim its once-strong growth rate.

Later in the month, another sign of trouble emerged as the company said that chief revenue officer Dean Darwin had left the company after making an inappropriate post on social media. Darwin had been hired just weeks earlier. The company said his responsibilities would be dispersed among other executives.

Now what

Alteryx shares have continued to decline into March, and at this point there's little reason for investors to get excited about the stock. The weak guidance and sudden departure of the CRO portrays a company in disarray, and it's clear why the stock has struggled while so many of its cloud peers have thrived during the crisis.

A significant portion of Alteryx's business come from on-premise sales, which has been difficult to do during the pandemic. As the crisis fades, revenue growth should rebound as pre-pandemic patterns with customer demand and its sales strategy should start to return. However, a return to high double-digit top-line growth seems unlikely at this point.

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