[Software] Why Smith Micro Software Stock Plunged Today

[FazzNoth]

Shares of Smith Micro Software (NASDAQ: SMSI) were tumbling today after the company reported worse-than-expected fourth-quarter results. The company missed analysts' consensus estimates for both revenue and earnings in the quarter. 

The tech stock was down by 15.3% at the end of the trading day. 

 

Smith Micro reported a non-GAAP net loss per share of $0.04 in the fourth quarter, which was worse than the $0.03 loss per share that Wall Street was expecting. Additionally, the company's sales of $14.7 million -- an increase of 18.5% from the year-ago quarter -- were below analysts' consensus estimate of $15.2 million for the quarter. 

Smith Micro CEO William Smith, Jr. said in a press release that the company's momentum in 2021 was "spurred by the largest acquisition in our history," referring to its mid-2021 acquisition of Avast's Family Safety Mobile business. 

Smith noted that the company added several Tier 1 wireless carriers to its customer base in 2021, and added that the company had "gained valuable experience and learned critical lessons over the past year that will pave the way for a smooth migration of carriers" to its platform. 

But investors were less enthusiastic about the company's results -- and a handful of analysts agreed with them. 

 

In addition to the worse-than-expected results, analysts from Lake Street, B. Riley, and Dawson James all lowered their price targets for Smith Micro's stock today.  
Investors may want to be cautious about investing in Smith Micro Software right now. With the company's less-than-stellar latest results and its share price down 29% over the past six months, there could be more volatility with this stock in the near term.

That doesn't mean the company won't be worth investing in over the long term, but investors may want to wait and see several more quarters of financial results before making a decision.

 

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Chris Neiger 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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