California-based software firm Sumo Logic, Inc. (SUMO) reported better-than-expected financial results for the fiscal third quarter ended October 31 after the market closed on Monday. However, shares of the company lost 0.7% in the extended trading session.
Sumo Logic provides cloud-based machine data analytics on security, operations and BI use cases. Its software allows organizations to address the challenges and opportunities presented by digital transformation, modern applications and cloud computing.
Q3 Results
The company reported an adjusted loss of $0.12 per share, narrower than the Street’s estimate of a loss of $0.14 per share but wider than the year-ago loss of $0.06 per share.
Revenue increased 20% year-over-year to $62 million, exceeding analysts’ expectations of $60.86 million.
Adjusted gross margin stood at 73%, lower than 77% in the third quarter of the last fiscal year. Adjusted operating margin came in at a negative 22%, wider than a negative 4% reported in the previous year.
CEO Comments
The President and CEO of Sumo Logic, Ramin Sayar, said, “Sumo Logic delivered another strong quarter of revenue growth for the fiscal third quarter. Results were again driven by continued adoption of our leading Continuous Intelligence platform, which helps our customers ensure application reliability, manage and optimize multi-cloud infrastructure, as well as secure and protect against modern security threats.”
Guidance
Along with the third-quarter results, the company has provided guidance for the fourth quarter and Fiscal Year 2022. (See Insiders’ Hot Stocks on TipRanks)
It expects revenue to range from $63.7 million to $64.7 million in the fourth quarter and adjusted loss to stand at $0.17 per share. The Street expects Sumo Logic to report revenue of $64.05 million and a loss of $0.15 per share during the quarter.
For Fiscal Year 2022, the company anticipates revenue to lie between $238.8 million and $239.8 million and adjusted loss to be in the range of $0.50 per share to $0.51 per share. The consensus estimate for revenue and loss are $237.98 million and $0.51 per share, respectively.
CFO Appointment
Further, Sumo Logic has appointed Stewart Grierson as CFO, effective December 13. Grierson will join Sumo Logic from data company Delphix, where he held the position of CFO.
Commenting on Grierson’s appointment, Sayar said, “I’m thrilled to have Stewart join Sumo Logic and am excited to partner with him to capture the large and growing market opportunity in front of us.”
Analysts’ Recommendation
Overall, the stock has a Moderate Buy consensus rating based on 5 Buys and 3 Holds. The average Sumo Logic price target of $24.50 implies 79.1% upside potential. Shares have lost 48.4% year-to-date.
Bloggers’ Opinion
TipRanks data shows that financial blogger opinions are 83% Bullish on the stock, compared to the sector average of 67%.
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