Why Evolv Technologies Stock Plummeted Today
Key Points
Evolv's Q1 earnings were in line with Wall Street's target, and sales were better than expected.
The company raised its full-year sales guidance.
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Evolv Technologies (NASDAQ: EVLV) stock suffered a double-digit sell-off in Wednesday's trading. The company's share price fell 13.5% in the session.
Evolv published its first-quarter results after the market closed yesterday and reported earnings that were in line with Wall Street's forecast, and sales that beat Wall Street's expectations. The company also raised its full-year sales guidance, but it wasn't enough to prevent sell-offs for the stock.
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Evolv served up solid Q1 results
Evolv posted a non-GAAP (adjusted) loss of $0.02 per share on sales of $46.3 million in the first quarter. Earnings for the period were in line with Wall Street's target, and sales beat the average analyst estimate by $2.6 million. Revenue was up 44.7% year over year in the quarter, and the business's loss was in line with what it recorded in the prior-year quarter. The company closed out Q1 with annual recurring revenue (ARR) of $127.3 million -- a 20% year-over-year increase.
What's next for Evolv?
With its fiscal Q1 report, Evolv raised its full-year sales target to between $175 million and $180 million. Previously, the company had targeted revenue between $172 million and $178 million. The company also reiterated guidance for ARR between $145 million and $150 million and a high-single-digit adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin.
All in all, Evolv's Q1 results and forward guidance actually looked pretty promising. While the stock suffered a double-digit sell-off today, the passage of time could show that the pullback today was an overreaction.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Evolv Technologies. The Motley Fool has a disclosure policy.
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