A10 Networks
stock was sinking Wednesday after the cloud security software company issued a third-quarter revenue forecast well below expectations as customers delayed purchases.
A10
(ticker: ATEN) said after the close of trading Tuesday that it expects third-quarter revenue of between $56.5 million and $58.5 million. Wall Street was expecting $73.7 million. In last year’s third quarter, A10 reported revenue of $72.1 million.
The company is expected to release third-quarter financial results on Nov. 7.
Chief Executive Dhrupad Trivedi said in a press release that industry headwinds the company previously discussed back in July when it held its fiscal second-quarter earnings call, including customers facing an increased cost of capital, continued in the third quarter.
“In our third quarter we experienced delays related to North American service provider customers pushing out capital expenditures. Deals we expected to close at the end of the quarter were delayed into future periods,” Trivedi said.
Shares of A10 tumbled 29% to $10.80 and were on track for their largest percentage decrease since October 2014 and lowest close since June 2021, according to Dow Jones Market Data.
Craig-Hallum Capital Group analyst Christian Schwab cut his price target to $15 from $19 but maintained his Buy rating on the stock.
“While the company continues to face near-term headwinds from North American service providers, with robust gross margins of 80%+, Ebitda margins in the mid to-high 20%’s, and a strong balance sheet with ~$164 million in cash or $2.17/share we are maintaining our Buy rating,” Schwab wrote in a research note Wednesday.
Shares of A10 have now fallen 35% this year, putting them on pace for their worst year on record.
Write to Angela Palumbo at [email protected]
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