Failing to deliver a holiday surprise to investors, CalAmp (CAMP 5.14%) reported third-quarter earnings for fiscal 2022 after the market closed yesterday, missing both top- and bottom-line estimates. But that's not the only thing that's motivating investors to exit their positions today, Wall Street's bearish take on the stock is providing more momentum for the stock's slide.
While markets are rising today, CalAmp is headed in the opposite direction. As of 10:53 a.m. ET, shares of the machine-to-machine communications specialist are down 27%.
Reporting revenue of $69 million, a 12% year-over-year decrease, CalAmp fell short of analysts' expectation that the company would book sales of $77.6 million. Unsurprisingly, on the company's conference call, Jeff Gardner, CalAmp's CEO, stated that the decline in sales "reflected reduced shipments as a result of the ongoing global component shortages." But the logistics headwinds didn't affect all areas of the company's business; CalAmp reported that software and subscription services revenue climbed 7% compared to the same period last year.
Not one or two but three analyst downgrades are providing more fodder for the bears today:
- Anthony Stoss, an analyst at Craig-Hallum, downgraded the stock to hold from buy, cutting his price target to $10 from $14.
- Canaccord Genuity analyst T. Michael Walkley reduced his price target to $14 from $15, keeping a buy rating
- Michael Latimore, an analyst at Northland, slashed his price target to $12 from $15 and maintained an outperform rating on the stock.
In light of how familiar investors are with the supply chain issues plaguing not just CalAmp but so many businesses across a variety of industries, the stock's sell-off today seems like a bit of an overreaction. Patient investors who can withstand the temporary supply chain challenges should be more impressed with the growth in software and subscription services revenue -- a sign that the company's solutions remain in high demand.