What happened
The stock of Confluent (CFLT +0.00%) is plummeting again today. The company's share price was down 10% as of 3:30 p.m. ET on Wednesday. Meanwhile, the S&P 500 index was down roughly 1.5%, and the Nasdaq Composite index was down 2.1%.
Russia's moves into Ukrainian territory are prompting sell-offs across the market, and Confluent is getting caught up in the pullback. The company's share price had been up as much as 1.1% earlier in the day, but increasingly bearish momentum as the day progressed erased the gains and pushed it to a near double-digit sell-off.
NASDAQ: CFLT
Key Data Points
So what
The market is weighing Russia's actions in Ukraine and moving out of stocks, and some growth-dependent software companies have been particularly hard hit. Confluent stock has also generally been sliding since the release of the company's fourth-quarter earnings report on Feb. 10, and it's now down roughly 47% since the release.
The company provides services built around the Apache Kafka open-source data-processing software, and shares are now down 13% from market close on the day of its initial public offering last June.
While the company's fourth-quarter results arrived with sales and earnings that topped the market's expectations, guidance appears to have underwhelmed investors. Deutsche Bank analyst Patrick Colville also responded to the release by lowering his one-year price target on the stock from $84 per share to $63, which seems to have created some sustained selling pressure.
A chart line and arrow moving down.
Now what
The company is guiding for sales between $117 million and $119 million in the first quarter and a non-GAAP (adjusted) net loss per share between $0.21 and $0.23. For the full year, management is guiding for an adjusted loss between $0.74 per share and $0.82 on revenue between $538 million and $546 million.
Based on the company's midpoint guidance, management is targeting roughly 40% sales growth this year. That represents a significant deceleration from the 64% growth it posted in 2021, but Confluent is facing a challenging comparison, and there's a favorable demand outlook for data-processing services over the long term.
Confluent now has a market capitalization of roughly $10.3 billion and is valued at approximately 19 times this year's expected sales.
