Stocks finally got some relief on Tuesday from the pounding that Wall Street has taken lately. A crucial meeting of the Federal Open Market Committee began, but the big news was a nearly $8 plunge in oil prices that brought West Texas Intermediate crude down to $95 per barrel. The Nasdaq Composite (^IXIC 0.46%) posted the biggest gains of the day, but the performances from the Dow Jones Industrial Average (^DJI +1.05%) and S&P 500 (^GSPC +0.00%) weren't too shabby, either.
|
Index |
Daily Percentage Change |
Daily Point Change |
|---|---|---|
|
Dow |
+1.82% |
+599 |
|
S&P 500 |
+2.14% |
+89 |
|
Nasdaq |
+2.92% |
+367 |
Data source: Yahoo! Finance.
Yet after the closing bell, earnings reports from some high-growth tech stocks continued to show the pressure that this segment has felt for months. Both SentinelOne (S 4.49%) and Smartsheet (SMAR +0.00%) enjoyed solid growth in revenue, but investors were nevertheless dissatisfied with their future outlooks.
SentinelOne eases lower
Shares of SentinelOne were down almost 4% in after-hours trading as of 5:30 p.m. ET today. The cybersecurity company's fourth-quarter financial results showed ongoing success for its fundamental business, but shareholders appear to have wanted more from the company's outlook for the coming 2023 fiscal year.
NYSE: S
Key Data Points
SentinelOne's financial figures were extraordinary. Total sales jumped 120% year over year to $65.6 million on a 123% rise in annualized recurring revenue. SentinelOne now counts more than 6,700 customers among its ranks, up 70% from 12 months ago. The company more than doubled the number of large customers paying $100,000 or more annually on its cybersecurity services to 520. A dollar-based net retention rate of 129% showed that customers are using the platform more once they sign up.
Moreover, SentinelOne expects its growth to remain strong in fiscal 2023, even if it wasn't quite as strong as some had wanted to see. The company projected sales of $74 million to $75 million for the fiscal first quarter, implying 13% to 14% sequential growth from the prior quarter. Full-year sales of $366 million to $370 million would correspond to a growth rate of roughly 80%. Nevertheless, investor sentiment seemed to reflect a wish for a better forecast after 120% year-over-year gains for the 2022 fiscal year.
Image source: Getty Images.
Smartsheet keeps working
Shares of Smartsheet took a bigger hit, falling 9% in after-hours trading. The fourth-quarter financial results of the provider of a work management platform showed good gains in revenue. But once again, the pace of growth didn't live up to high expectations.
Smartsheet's fourth-quarter sales rose 43% from year-ago levels, with 44% gains in subscription-based revenue. But adjusted losses ballooned higher, more than tripling the amount Smartsheet lost in the fourth quarter of the previous fiscal year and working out to $0.12 per share. Cash flow went negative as well. For the full 2022 fiscal year, revenue growth of 43% was consistent with quarterly figures, although full-year losses were slightly narrower than in fiscal 2021.
Smartsheet saw strong internal metrics, with dollar-based net retention rates coming in at 134%, up from 123% a year ago. Customers with $100,000 or more in annual contract value jumped 74% to 1,026, as Smartsheet saw continued concentration of revenue among its highest-value clients.
NYSE: SMAR
Key Data Points
Yet Smartsheet sees full-year fiscal 2023 growth slowing to 36% to 37%, with revenue projected between $750 million and $755 million. That would value the company at about eight times forward sales estimates, but in today's market environment, investors no longer seem content with those valuations for a money-losing company.
