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HashiCorp stock plummets 20% on weak outlook; Goldman encouraged by FCF breakeven trajectory

Published 06/08/2023, 06:39 AM
© Reuters.  HashiCorp stock plummets 22% on disappointing outlook
HCP
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HashiCorp (NASDAQ:HCP) shares plunged 20% in premarket Thursday after the company slashed its full-year forecast.

While EPS of ($0.07) and revenue of $138 million (up 37% year-over-year) came in above the consensus estimates of ($0.14) and $133.13M, respectively, management’s guidance missed expectations.

“Despite the difficult macroeconomic environment, we saw meaningful progress with new customers in the first quarter,” said Dave McJannet, CEO, HashiCorp. “And while we saw pressure in the buying process, the large number of new customers gives us ongoing confidence in both the market trend of cloud adoption and our ability to deliver value helping large enterprises operate their cloud infrastructure.”

The company ended Q1/24 with 4,392 customers, up from 3,240 customers at the end of Q1/23. Customers with equal or greater than $100,000 in ARR was 830, up from 704 customers at the end of Q1/23, representing 89% of total revenue in Q1/24 (vs. 88% in Q1/23).

For Q2/24, the company expects EPS in the range of ($0.16)-($0.14), compared to the consensus of ($0.12), and revenue in the range of $137M-$139M, compared to the consensus of $141M.

For the full year, the company expects EPS of ($0.27)-($0.24), compared to the consensus of ($0.39), and revenue of $564M-$570M, compared to the consensus of $593M.

Goldman Sachs analysts lowered the price target to $30 per share on the Neutral-rated HCP shares but remain encouraged by FCF breakeven trajectory.

"While we continue to believe HashiCorp has a long growth runway as it emerges as the standard for cloud enablement, limited visibility into the duration of demand headwinds keep us on the sidelines," they said.

Stifel analysts also cut the price target, going to $31 per share on the Buy-rated HCP stock.

"Despite near-term headwinds, we believe HashiCorp remains a long-term beneficiary of secular cloud growth and is positioned to reaccelerate growth in coming years as the macro environment stabilizes," the analysts wrote in a note.

(Additional reporting by Senad Karaahmetovic)

 
 

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