SolarWinds Earnings Preview: What to Expect on October 31st
SolarWinds, a leading provider of information technology (IT) management software, is gearing up to release its quarterly earnings report on Thursday, October 31st, 2024. Investors are eagerly awaiting the announcement, hoping for news of exceeding estimates and positive guidance for the next quarter.
Analyst Expectations and Past Performance
Analysts anticipate SolarWinds to report an earnings per share (EPS) of $0.25. It’s important to remember that stock prices can be heavily influenced by future projections rather than just past performance. In the previous earnings release, the company beat EPS by $0.03, leading to a 4.22% drop in the share price the following trading session. Here’s a look at SolarWinds’s past performance and the resulting price change:
| Quarter | EPS Estimate | EPS Actual | Price Change % |
|—|—|—|—|
| Q2 2024 | 0.23 | 0.26 | -4.0% |
| Q1 2024 | 0.22 | 0.29 | 1.0% |
| Q4 2023 | 0.21 | 0.24 | -1.0% |
| Q3 2023 | 0.18 | 0.23 | 2.0% |
Analyst Views on SolarWinds and Peer Comparisons
For investors, understanding market sentiments and expectations within the industry is crucial. Analysts have given SolarWinds a total of 2 ratings, with the consensus rating being Neutral. The average one-year price target is $13.5, indicating a potential 8.0% upside.
To gain further perspective, let’s compare SolarWinds with three significant industry players: N-able, Zuora, and Progress Software.
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N-able:
Analysts have given a Buy consensus rating with an average 1-year price target of $16.5, implying a potential 32.0% upside.*
Zuora:
Analysts favor a Buy trajectory with an average 1-year price target of $13.25, suggesting a potential 6.0% upside.*
Progress Software:
Analysts favor a Buy trajectory with an average 1-year price target of $70.5, suggesting a potential 464.0% upside.Peer Analysis Summary:
| Company | Consensus | Revenue Growth | Gross Profit | Return on Equity |
|—|—|—|—|—|
| SolarWinds | Neutral | 4.44% | $173.00M | 0.86% |
| N-able | Buy | 12.60% | $100.28M | 1.32% |
| Zuora | Buy | 6.80% | $78.10M | -4.36% |
| Progress Software | Buy | 2.11% | $149.62M | 6.88% |
Key Takeaway:
SolarWinds ranks at the bottom for Revenue Growth among its peers. It is in the middle for Gross Profit. For Return on Equity, SolarWinds is at the bottom compared to its peers.SolarWinds: A Closer Look
SolarWinds Corp is a provider of information technology (IT) and management software. The company offers full-stack observability solutions designed to monitor and manage networks, systems, databases, and applications across on-premises, multi-cloud, and hybrid IT environments.
Financial Performance Dissected
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Market Capitalization:
SolarWinds’ market capitalization is below industry benchmarks, indicating a reduced size compared to its peers. This positioning may be influenced by factors such as growth expectations or operational capacity.*
Revenue Growth:
SolarWinds achieved an impressive revenue growth rate of 4.44% as of June 30th, 2024. This signifies a substantial increase in the company’s top-line earnings. However, compared to competitors, the company’s growth rate is lower than the average among peers in the Information Technology sector.*
Net Margin:
SolarWinds boasts an impressive net margin of 5.75%, surpassing industry averages, demonstrating strong profitability and effective cost management.*
Return on Equity (ROE):
SolarWinds showcases effective utilization of equity capital with an impressive ROE of 0.86%, exceeding industry averages.*
Return on Assets (ROA):
SolarWinds demonstrates efficient use of assets and strong financial health with a remarkable ROA of 0.35%, exceeding industry averages.*
Debt Management:
SolarWinds’s debt-to-equity ratio is notably higher than the industry average. With a ratio of 0.97, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.Stay tuned for SolarWinds’ earnings report on October 31st. This release will provide valuable insights into the company’s performance and future trajectory.
