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Smartsheet (SMAR) to Report Q3 Earnings: What's in Store?

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·4 min read
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Smartsheet Inc SMAR is slated to report third-quarter fiscal 2022 results on Dec 2.

The company recently raised its revenue outlook for the fiscal third quarter, driven by higher demand for its platform along with robust sales execution and increasing deal activity. The company also stated that it is benefitting from its Advance premium platform capabilities.

For the fiscal third quarter, the company now expects revenues between $143.5 million and $144.5 million, indicating year-over-year growth of 45-46%.

The Zacks Consensus Estimate for revenues is currently pegged at $143.7 million, which suggests growth of 45.3% from the year-ago quarter’s reported figure.

Non-GAAP loss is anticipated in the range of 10-12 cents per share. The consensus mark for fiscal third-quarter loss has been steady at 11 cents per share in the past 30 days. Non-GAAP net loss per share was 12 cents in third-quarter fiscal 2021.

Smartsheet Price and EPS Surprise

Smartsheet Price and EPS Surprise
Smartsheet Price and EPS Surprise

Smartsheet price-eps-surprise | Smartsheet Quote

Factors to Note

Continued demand for Smartsheet’s cloud-based platform owing to accelerated global digital transformation is likely to have driven the top line in the fiscal third quarter. Smartsheet’s cloud-based platforms facilitate the execution of work and aid teams and organizations to plan, automate, manage and report work.

The company is also benefitting from its Advance premium platform capabilities along with work apps no-code offerings.

Increasing customer acquisitions across various verticals, including technology, healthcare and life sciences, bode well. Smartsheet ended the last reported quarter with more than 9 million users, with annual recurring revenues (ARR) increasing 10% sequentially to more than $0.5 billion. In the last reported quarter, the number of customers with annualized contract value ("ACV") of $5,000 or higher increased 34% year over year to 13,420.

The company is constantly rolling out new product offerings to boost value for customers. Smartsheet’s efforts to enter new markets and improve existing product capabilities might get reflected in subscription revenues in the to-be-reported quarter.

The Zacks Consensus Estimate for fiscal third-quarter subscription revenues is pegged at $129 million, indicating growth of 41.8% on a year-over-year basis.

The Zacks Consensus Estimate for fiscal third-quarter billings is pegged at $152.4 million, indicating growth of 35.7% on a year-over-year basis.

Smartsheet projects billings to be between $160.5 million and $161.5 million, indicating year-over-year growth of 49-50%. The guidance is adjusted for $4.7 million received as deferred revenue acquired as part of the Brandfolder acquisition concluded in the third quarter of fiscal 2021.

Higher expenditures toward platform development and increasing competition in the cloud space might have dented the company’s profitability in the to-be-reported quarter.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Smartsheet has an Earnings ESP of -12.00 % and a Zacks Rank #3 (Hold).You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

AutoZone AZO has an Earnings ESP of +2.78% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

AutoZone is set to report first-quarter fiscal 2022 results on Dec 7. The Zacks Consensus Estimate for earnings is pegged at $20.65 per share, which suggests an increase of 11% from the prior-year quarter’s reported figure.

Shares of AutoZone have rallied 57.9% in the past year compared with the Zacks Automotive- Retail and Wholesale -parts industry’s rise of 46.2%.

Lululemon Athletica LULU has an Earnings ESP of +1.44% and a Zacks Rank of 2.

Lululemon Athletica is scheduled to release third-quarter fiscal 2021 results on Dec 9. The Zacks Consensus Estimate for earnings is pegged at $1.39 per share, suggesting an increase of 19.8% from the prior-year quarter’s levels.

Shares of Lululemon Athletica have rallied 22.7% in the past year compared with the Zacks Textile Apparel industry’s rise of 20.6%.

PVH Corporation PVH has an Earnings ESP of +1.61% and a Zacks Rank of 1.

PVH is scheduled to release third-quarter fiscal 2021 results on Dec 1. The Zacks Consensus Estimate for earnings is pegged at $2.07 per share, indicating an increase of 56.8% from the year-ago quarter’s tally.

Shares of PVH have soared 34.3% in the past year compared with the Zacks Textile Apparel industry’s rise of 20.6%.


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Smartsheet (SMAR) : Free Stock Analysis Report

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