On Wednesday, Pivotal Software’s latest quarterly results turned several analysts’ cautious on the stock.
Generating an adjusted loss of -3 cents a share for the fiscal first quarter, the cloud-oriented software company fared better compared to analysts’ estimates of -5 cents a share. It is also an improvement over the -10 cents a share loss of the year-ago quarter.
Pivotal’s first quarter revenue of $185.7 million also beat analysts’ expectation of $184.1 million.
However, the company lowered its full-year revenue outlook to a range of $756 million to $767 million, well below analysts’ consensus estimate of $803 million (based on Refinitiv poll).
For the fiscal second quarter in particular, Pivotal expects revenue to range between $185 million to $189 million, lagging the average analyst estimate of $198 million, (based on Refinitiv poll).
Following the report, analysts Daniel Ives and Strecker Backe of Wedbush Securities called Pivotal’s first quarter results a “train wreck” , due to weak billings numbers and lower-than-expected guidance. They lowered their rating on the stock to “neutral” from “outperform”, and slashed their price target to $15 from $26 per share.
Analysts at Needham, on the other hand, maintained their “buy” rating on Pivotal. But they lowered their price target to $21 from $28 per share.
Alex Kurtz and Steven Enders of KeyBanc Capital Markets re-iterated their “overweight” rating on Pivotal, while reducing their price target to $21 from $27.
On Wednesday, Pivotal shares declined more than -40%.