Why EverCommerce Stock Is Plummeting Today
Key Points
EverCommerce's Q3 earnings were in line with expectations, but sales missed Wall Street's target.
The company lowered its full-year sales forecast.
While the business increased its adjusted EBITDA target for the year, investors aren't impressed in light of a weakening sales base.
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EverCommerce (NASDAQ: EVCM) stock is getting crushed in Friday's trading. The software-as-a-service (SaaS) specialist's share price was down 19.9% as of 12:45 p.m. ET. Meanwhile, the S&P 500 was down 1.1%, and the Nasdaq Composite had pulled back by 1.7%.
EverCommerce published its third-quarter results after yesterday's market close, posting earnings that were in line with Wall Street's target and sales that fell short of expectations. With today's valuation contraction, the stock is now down roughly 16% year to date.
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EverCommerce stock sinks on Q3 sales miss
For the third quarter, EverCommerce saw earnings per share of $0.03 -- which was in line with Wall Street's forecast. Meanwhile, sales for the period came in at $147.5 million -- coming up roughly $0.45 million short compared to the average analyst estimate. With sales declining roughly 16% year over year and arriving weaker than already soft expectations, the stock is seeing a big pullback today.
What's next for EverCommerce?
On the heels of its Q3 report, EverCommerce is guiding for full-year sales to be between $584 million and $592 million. Meanwhile, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) is projected to come in between $174.5 million and $179 million.
While the company's adjusted EBITDA guidance represents an improvement over its previous target for adjusted EBITDA to be between $171 million and $177 million, the new sales guidance is a step down from its previous forecast for annual revenue to be between $581 million and $601 million. EverCommerce's sales outlook has continued to weaken, and improvements for adjusted EBITDA won't mean much over the long term unless the business can reenergize its sales engine.
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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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