The value of shares in the e-signature company fell after it reported earnings last night.
You might think that it is struggling because the market isvaluing it at a cheaper price than it did in 2020. It's not really possible. The company posted 25% in top-line expansion in its most recent quarter, with revenue coming in around $7 million ahead of expectations. The company has a growth target that is in line with investor expectations.
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After reporting better-than- expected trailing growth and in-line guidance, is it confusing to see a sharp repricing? Don't be, that's not right. As growth slows, technology companies lose more money.
As market mania fades from 2021 highs, investor expectations are changing rapidly and it’s catching a host of technology companies flat-footed.
The end of the growth-at-all-costs era is not just a shift from revenue expansion to profitability. Many tech companies are growing at a slower rate of growth while their profit demands are increasing. It is difficult to retard a growth deceleration while still making more money. There are many signs that it isn't going well.
Free cash flow increased from the year-ago period. At the same time, GAAP net income went downhill.
GAAP net loss per basic and diluted share was $0.14 on 200 million shares outstanding compared to $0.04 on 194 million shares outstanding in the same period last year.
That isn't a good idea.
The same fate is being avoided by tech companies. Around the world, the pivot to profitability is happening. Some recent news makes our case.
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