What happened
Ibex (IBEX 1.07%) stock is plummeting Thursday following weaker-than-expected quarterly results. The company's share price was down 25.6% as of 2:30 p.m. ET, according to data from S&P Global Market Intelligence.
After the market closed yesterday, Ibex published results for the fourth quarter of its recently concluded fiscal year, which ended June 30. The customer-experience-outsourcing specialist reported non-GAAP (adjusted) earnings per share of $0.33 on sales of $124.43 million, missing the average analyst earnings estimate by $0.16 and the average sales estimate by roughly $1.4 million.
So what
Ibex's revenue increased just 0.7% year over year in the fiscal fourth quarter. Meanwhile, the company's net income fell to $4.5 million -- down from $6.4 million in the prior-year period. Adjusted net income came in at $6.2 million, slipping from $8.3 million in last year's quarter.
Following the underwhelming Q4 results, RBC Capital Markets published a note on Ibex and downgraded its rating on the stock to sector perform from outperform. The firm also lowered its one-year price target on the stock from $27 per share to $18 per share. Based on Ibex's current stock price of roughly $13.60 per share, that would still imply potential upside of roughly 32%. But the rating and price-target cut remain clearly negative events as far as valuation catalysts go.
Now what
In addition to underwhelming Q4 results, Ibex also issued guidance that points to weak sales performance this year. The stock is now down roughly 45% year to date.
For the first quarter of its current fiscal year, Ibex is guiding for sales to be between $122 and $125 million. Hitting the midpoint of that target would result in a revenue decline of 3.4% year over year.
For the full-year period, management anticipates that sales will come in between $525 million and $535 million. If the business were to hit the midpoint of that guidance range, sales would climb just 1.3% compared to the $523.1 million in sales recorded last year.
