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Why Boingo Wireless Shares Fell 20% Last Month

Anders Bylund, The Motley Fool

What happened

Shares of Boingo Wireless (NASDAQ: WIFI) fell 20.1% in November, according to data from S&P Global Market Intelligence. The provider of wireless networking hotspots in airports, hotels, and other public places reported solid third-quarter results early in the month, but with a side of mixed next-quarter guidance. The stock dropped 19% that day.

So what

Boingo reported a net loss of $0.01 per share in the third quarter, an improvement from a $0.15 loss per share in the year-ago period and ahead of Wall Street's consensus target of -$0.09 per share. Revenue rose 22% to $65.3 million, beating your average analyst's estimate of $63.3 million.

Looking ahead, Boingo's management guided for full-year losses of roughly $0.18 per share, which works out to a fourth-quarter profit of about $0.04 per share. The analyst consensus called for break-even Q4 results. Finally, hitting the full-year revenue target will require something like $63.4 million in fourth-quarter sales. Here, the consensus called for $65.9 million.

Three huge, cartoon-style WiFi symbols hang in the air. Seven equally cartoonish characters stand or sit around them, using mobile devices and laptops

Image source: Getty Images.

Now what

So Boingo's investors focused on the weak year-end revenue goals while ignoring a stronger bottom-line target -- as well as pretty decent actual results. That's life sometimes for companies that run on negative yearly earnings and rich price-to-sales ratios.

The stock has now plunged 31% lower over the last three months and traded sideways in 2018 as a whole. Raucous revenue growth plus stalled stock charts often add up to decent buy-in opportunities.

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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool owns shares of Boingo Wireless. The Motley Fool has a disclosure policy.