Why ZoomInfo Stock Plummeted Today
Key Points
ZoomInfo's Q4 sales and earnings results came in significantly better than Wall Street's expectations.
Despite the Q4 beats, the stock fell today because management's forward guidance disappointed investors.
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ZoomInfo Technologies (NASDAQ: GTM) stock got hit with strong selling pressures Tuesday. The stock sank 9.4% in the daily session and had been down as much as 20.2% earlier in the day's trading.
ZoomInfo published its Q4 results after the market closed yesterday and reported sales and earnings that beat Wall Street's forecasts. Despite substantial Q4 beats, the stock sold off on underwhelming forward guidance.
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ZoomInfo breezed by Wall Street's Q4 targets
ZoomInfo posted non-GAAP (adjusted) earnings per share of $0.32 on sales of $319.1 million in the fourth quarter. For comparison, the average analyst estimate had called for adjusted earnings per share of $0.28 on sales of roughly $309.3 million. ZoomInfo's revenue increased 3.2% year over year in Q4, and adjusted operating income rose roughly 6% year over year to hit $122.6 million. Despite performance beats in Q4, investors weren't happy with management's forward guidance.
ZoomInfo expects little growth this year
ZoomInfo is guiding for sales between $306 million and $309 million in the current quarter, representing a significant decline on a sequential quarterly basis. Adjusted operating income is also projected to decline to between $105 million and $108 million.
For the full year, management is targeting sales between $1.247 billion and $1.267 billion. -- suggesting a modest improvement over the roughly $1.25 billion in sales recorded last year. Meanwhile, guidance for an adjusted operating profit between $456 million and $466 million calls for annual growth of approximately 3.6% at the midpoint. With disappointing growth forecasts for this year, investors are rerating the business-services specialist.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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