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Why Anaplan Stock Dropped 12% This Morning

By Rich Smith - May 27, 2021 at 11:34AM

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An earnings miss and a CFO shakeup rattle investors on Thursday.

What happened

Shares of software-as-a-service company Anaplan (PLAN) tumbled 11.7% through 10:30 a.m. EDT this morning despite its reporting only a modest "miss" on its Q1 2022 earnings. (That's right. Anaplan's financial calendar is about a year ahead of everybody else's.)

Analysts had forecast that Anaplan would lose $0.09 per share pro forma for Q1 on sales of $127.1 million. As it turned out, Anaplan lost more than projected -- $0.10 per share -- but did a bit more business than expected -- sales of $129.8 million.  

Simple red arrow declining stock chart on a white checked background

Image source: Getty Images.

So what

Most days, investors would probably shrug that off as a "mixed quarter" and give a stock like Anaplan a pass, but tech investors haven't been in a very forgiving mood lately, and today they're punishing Anaplan stock severely. Is that fair?

Well, let's see here. CEO Frank Calderoni said that Anaplan "started our fiscal year with a solid first quarter," and from a revenue perspective it's hard to argue with that. In addition to beating expectations, Anaplan reported 25% year-over-year sales growth in the quarter, with subscription revenue in particular up 26%.  

That's the good news. The bad news is that Anaplan didn't only lose more money pro forma than analysts had warned against. When calculated according to generally accepted accounting principles (GAAP), Anaplan's Q1 loss was actually much bigger than that pro forma number makes it look -- $0.36 per share, 24% worse than last year.

Now what

Now, there's more good news as well. On the subject of guidance, Anaplan told investors to expect its sales strength to continue into Q2 and the full fiscal year 2022. Revenues are expected to range from $133.5 million to $134.5 million in Q2 (ahead of the $132.4 million Wall Street consensus). For the year, Anaplan sees revenue of from $555 million to $560 million, similarly ahead of Street expectations for $553.8 million.

But there's also more bad news. Company CFO has chosen today's earnings miss as a good day to step down "to spend more time with his family." This suspicious timing is almost certainly contributing to today's investor unease.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Anaplan Inc. The Motley Fool has a disclosure policy.

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