What happened
Shares of Alteryx (AYX), the provider of data analytics software, continued to struggle last month as the company fell along with a number of other high-priced growth stocks at the beginning of the month and never recovered. There was little company-specific news on Alteryx during the month.
According to data from S&P Global Market Intelligence, the stock finished the month down 13%.
AYX data by YCharts.
So what
As you can see from the chart above, Alteryx's losses for the month came in just a few days at the beginning of the March. The stock fell 15% over the first week of March, continuing a slide in February when shares sold off following disappointing guidance for 2021 in its first-quarter earnings report. They also dipped later in the month after the company's newly hired chief revenue officer was forced to resign due to an inappropriate social media post.
Image source: Getty Images.
High-priced tech stocks fell across the board in the first week of March as the 10-year Treasury yield moved higher, raising investors' discount rates and therefore pressuring growth stocks since that makes their future earnings less valuable. Though Alteryx has struggled over most of the past year, the cloud stock was still caught up in the sell-off, as its shares are expensive according to traditional metrics, and investor sentiment seems to be moving away from cloud stocks.
Alteryx did recoup some of its losses on the last day of March after an analyst note from Citigroup signaled bullishness, and the following day Morgan Stanley initiated coverage with an equal-weight rating and a price target of $93, giving the stock some upside. Analyst Sanjit Singh acknowledged the opportunity that's in front of the company, but said there was still much work to be done.
Now what
Indeed, Alteryx faces a number of challenges after its revenue growth went from nearly doubling early in 2020 to flat at the end of the year. The company's on-premise business has proved to be a poor fit with the demands of the pandemic, and new CEO Mark Anderson has taken over a company in need of a turnaround, especially as competition is on the rise.
The data analytics stock should get some tailwinds from the reopening, but the company will need to execute for the stock to return to its former heights.
