Shares of streaming video technology outfit Brightcove (BCOV 0.61%) are down 12.9% as of 12:40 p.m. ET on Thursday following a fiscal fourth-quarter earnings beat that was marred by disappointing guidance.
For the three-month stretch ending in December, telco technology company Brightcove turned $52.6 million worth of sales into per-share operating earnings of $0.10. Both numbers beat expectations; analysts had been calling for a bottom line of only $0.03 per share. However, the top line fell 2% year over year, and earnings were well down from the year-earlier comparison of $0.14 per share, dashing hopes that the company may be doing better than investors had been led to believe.
Perhaps the crux of today's sell-off, though, stems from guidance. Brightcove expects to see a top line of only between $50.5 million and $51.5 million for the fiscal first quarter now underway, versus analyst expectations of $53.6 million. The analyst community is also modeling a bottom line of $0.06 per share for fiscal Q1, versus the company's guidance of between $0.02 and $0.04. The guidance is not only below expectations but also less than year-earlier numbers of $0.15 per share and sales of $53.5 million. The full-year guidance isn't any more compelling.
Brightcove shares aren't just down today. With Thursday's drubbing, the stock's well into new 52-week-low territory; it's been a while since the company's dished out any decidedly good news.
And that's tempting. Even with the company's own tepid outlook, shares are now trading around 40 times the midpoint of Brightcove's 2022 earnings guidance of between $0.14 and $0.23. Although that's a rich valuation by large-cap, blue chip standards, for a small company like this one, it's palatable.
This is a case, however, where the smart move is making sure a sell-off has run its full course. The sell-off appears unstoppable right now, until further notice. It's more of a name to add to your watch list, waiting for the top and bottom lines to show clear improvement.