Amplitude guidance for full-year and first-quarter revenue was lower than consensus.
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Amplitude stock is cratering Thursday, triggered by disappointing full-year guidance. That represents a buying opportunity, according to at least one analyst.
Shares of Amplitude (ticker: AMPL) were down 51%, at $ 20.34, in recent trading. The behavioral analytics company, which reported fourth-quarter earnings late Wednesday, said it expects 2022 revenue to grow between 35% and 40%. That’s below the consensus call of 43% growth, said William Blair analyst Bhavan Suri.
He maintained his Outperform rating despite the outlook, as he sees potential for stronger growth over the long term.
“While the guidance is disappointing, we think the aftermarket selloff is an overreaction,” because Amplitude “has strong underlying growth drivers, is a leader in a new and emerging category, and now has multiple products it can monetize,” Suri wrote in a Wednesday note. “We are buyers on the pullback once the dust settles.”
For the fourth quarter, which ended in December, the software-as-a-service company reported five cents a share in losses on sales of $49.4 million, beating analysts’ expectation of eight cents a share in losses on $47 million in revenue. But the company said it expects revenue to be between $50 million and $51 million in the first quarter of 2022, which was about $1 million below consensus, according to Suri.
Amplitude reported revenue of $167.3 million for fiscal 2021, which was up 63% year over year. Its clients include Ford Motor (F).
Suri sees future upside as the company’s audience-management products mature and adoption reaches critical mass. “We don’t believe the new products are layering in materially to the results at this point,” he wrote. “It’s still early days here from a revenue contribution perspective.”
The analyst noted that 2021 was a very strong year for Amplitude and that its 2022 guidance was conservative to account for potential uncertainty. “It is building a new category and, thus, the pace of customer expansion activity can vary,” Suri noted. He told Barron’s he doesn’t have a price target on the stock, given his long-term outlook.
On the flip side, Morgan Stanley analyst Elizabeth Elliott, who has an Equal-weight rating, slashed her price target to $34 from $70. She expects the “shares to be pressured until the magnitude of a growth deceleration off a strong FY21 becomes clear,” she wrote.
“The company is a category leader in a large ~$37B TAM [Total Addressable Market], but we expect it will take time and investment to address the greenfieldopportunity,” she said.
The average target for the stock price among analysts tracked by FactSet was $46.33 near midday on Thursday.
Write to Karishma Vanjani at [email protected]
