Why Smith Micro Software Stock Plunged Today

What happened 

Shares of Smith Micro Computer software (NASDAQ:SMSI) ended up tumbling today after the company described even worse-than-envisioned fourth-quarter outcomes. The enterprise missed analysts’ consensus estimates for both equally income and earnings in the quarter. 

The tech stock was down by 15.3% at the conclusion of the investing day. 

So what 

Smith Micro documented a non-GAAP web loss for every share of $.04 in the fourth quarter, which was worse than the $.03 reduction per share that Wall Avenue was expecting. On top of that, the company’s income of $14.7 million — an improve of 18.5% from the calendar year-ago quarter — have been below analysts’ consensus estimate of $15.2 million for the quarter. 

A white arrow pointing down on top of a red chart.

Picture source: Getty Visuals.

Smith Micro CEO William Smith, Jr. explained in a push launch that the firm’s momentum in 2021 was “spurred by the greatest acquisition in our background,” referring to its mid-2021 acquisition of Avast’s Relatives Safety Cell company. 

Smith observed that the organization included many Tier 1 wi-fi carriers to its consumer foundation in 2021, and included that the organization had “acquired beneficial working experience and figured out critical classes above the past yr that will pave the way for a clean migration of carriers” to its system. 

But investors were being a lot less enthusiastic about the firm’s results — and a handful of analysts agreed with them. 

In addition to the worse-than-expected outcomes, analysts from Lake Street, B. Riley, and Dawson James all reduced their rate targets for Smith Micro’s inventory right now.  

Now what 

Buyers may well want to be cautious about investing in Smith Micro Program appropriate now. With the firm’s significantly less-than-stellar most current final results and its share cost down 29% over the earlier 6 months, there could be a lot more volatility with this stock in the in close proximity to term.

That will not suggest the corporation would not be truly worth investing in in excess of the long expression, but buyers could want to wait around and see various far more quarters of money effects before earning a determination.


This short article signifies the view of the author, who could disagree with the “official” recommendation situation of a Motley Fool high quality advisory service. We’re motley! Questioning an investing thesis — even just one of our very own — helps us all think critically about investing and make decisions that assistance us become smarter, happier, and richer.