SolarWinds Corporation Shares Lost 10% Since Q1 Results Announcement

SolarWinds Corporation (NYSE:SWI) shares lost around 10% since Wednesday’s close following the company’s reported Q1 results. While the results came in better than expected, the full-year EPS guidance missed the estimates.

Q1 EPS was $0.24, compared to the consensus of $0.22, and revenue was $176.9 million, compared to the consensus of $174.62 million. Total ARR remained relatively flat as 30% year-over-year subscription ARR growth was offset by a 6% decline in maintenance ARR.

The company’s management noted the early success of their hybrid observability solution and migration journey to SaaS. The company provided its full 2022-year outlook, expecting EPS in the range of $0.88-$0.95, below the consensus of $1.05, and revenue in the range of $730-750 million, compared to the consensus of $741 million.

Analysts at RBC Capital said they remain optimistic about their long-term growth but remain cautious in the near term due to uneven macros. The analysts lowered their price target on the company’s shares to $14 from $16, while reiterating their sector perform rating.

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