AYX just slipped this into a press release put out about a CEO transition:
Updated Third Quarter Financial Outlook
Alteryx currently expects that total revenue for the third quarter ended September 30, 2020 will be in the range of $126.0 million to $128.0 million, representing 22% to 24% year-over-year growth, ahead of the previously issued guidance of $111.0 million to $115.0 million.
This information is based on information available to Alteryx as of the date of this release and is subject to the completion of its quarterly financial closing procedures and review by Alteryx’s independent registered public accounting firm.
Alteryx expects to report its third quarter 2020 financial results and host a conference call to discuss these results after the U.S. financial markets close on Thursday, November 5, 2020.
The stock is currently up more than 20% after hours
Their quarter closed last month. When Alteryx reports in November, one would think this new guidance should be fairly close to the actual results.
After hours is now up almost 30%. Does the market expect them to significantly beat the new guidance?
I’m confused why 24% revenue growth would warrant this sharp of a rise. Yes, this is improvement from last quarter revenues of +17%. But they’re a long way off from previous growth rates.
Am always trying to learn and appreciate if anyone has some insight to share.
Thanks
JT
(Sold AYX but believe in company’s long term prospects.)
Alteryx currently expects that total revenue for the third quarter ended September 30, 2020 will be in the range of $126.0 million to $128.0 million, representing 22% to 24% year-over-year growth, ahead of the previously issued guidance of $111.0 million to $115.0 million.
This will hopefully be sandbagged as well. I figured I was one of the last still holding AYX, since all my shares in a taxable account! I’ve already got a ridiculous tax bill with LVGO gains and some unbelievable options moves so I figured if things did not improve I would sell in 2021. Now I am certainly more enthusiastic about the upcoming call and what they will say about Q4.
AYX is currently valued at 16-17 multiple with an expected growth rate of 12% this upcoming quarter and likely recovery in 2021 (probably why the multiple is so high for a 12% grower), so now they’re revising to 24%, which likely means 30%+ maybe. At current prices of $145-150, multiple expanded to ~20s which is on par for a 30 grower just about.
Gave a disappointing guidance then dropped 25% and raised it pop 25% as well in the same Q. I don’t think that’s a good data analyst company should do IMO.
I’m confused why 24% revenue growth would warrant this sharp of a rise. Yes, this is improvement from last quarter revenues of +17%. But they’re a long way off from previous growth rates.
Ok to put it another way, they raised revenue guidance at the mid point by $13m.
Annualised this is a $52m increase.
Prior to their meltdown they were trading at an EV/Sales multiple of 25.
Applying 25x to $52m gives them an uplift in valuation of $1.3bn
After hours trading is notoriously volatile and indicating a $2bn increase in market cap.
So this is not altogether a confusing response. Given that 25x was a low valuation multiple in the first place for at the time a fast growing business and with the expectation that the business can continue to bounce back further from what can be seen as a temporary episode that we are past the worst of then I’m not finding this confusing or even an extreme valuation to worry about.
The stock spikes because of the revenue showing signs of recovering. Recall their drop had to do with inability to engage their sales arm which faced two headwinds
The physical act of selling. Relies heavily on partners who are in person consults. Unable to rely on this during COVID.
IT budgets were all triaged fo ramp up spends on security and communication tools to support WFH.
Neither of these were reflective on the business but rather the environment.
What IS concerning is the abrupt exist of Dean, their CEO, and a co-founder.