Workiva (WK - Free Report) shares have been witnessing a downside since the company reported third-quarter 2017 results.
Shares of Workiva have merely returned 3.6% in the past three months, underperforming the industry’s gain of 10.6%.
Let’s delve deeper and try to find out what’s taking a toll on this Zacks Rank #4 (Sell) company.
Analysts have become increasingly bearish on the stock in the past couple of months with all estimates moving south and no movement in the opposite direction. The Zacks Consensus Estimate for the current quarter declined from a loss of 15 cents to 22 cents.
The company also provided a not-so-encouraging guidance. For fourth-quarter 2017, total revenues are anticipated between $53 million and $53.4 million. The Zacks Consensus Estimate is pegged at $53.3 million. Non-GAAP operating loss is expected in the range of $8.8-$9.2 million.
Workiva expects negative operating cash flow in the fourth quarter due to the timing of the payment of certain annual cash bonuses. Non-GAAP net loss is expected in the range of 22-23 cents per share. The Zacks Consensus Estimate is pegged at 22 cents per share.
For 2017, Workiva forecasts total revenues between $206.4 million and $206.8 million. The Zacks Consensus Estimate is pegged at $206.7 million. Non-GAAP operating loss is expected in the range of $25.2-$25.6 million.
Non-GAAP net loss is expected in the range of 63-64 per share. The Zacks Consensus Estimate is pegged at 63 cents per share.
Intensifying competition from peers like Oracle (ORCL - Free Report) , SAP Business One, Adaptive Planning and OIKOS Treasury Suite is a concern for the company.
We expect the aforementioned factors to hurt the company's near-term profitability. Hence, we recommend investors to stay away from Workiva shares until its Zacks Rank and estimates improve.
Zacks Rank &Stocks to Consider
A couple of top-ranked stocks in the broader technology sector include Broadcom Limited (AVGO - Free Report) and NVIDIA Corporation (NVDA - Free Report) . These stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Broadcom and NVIDIA have long-term expected EPS growth rate of 13.7% and 10.25%, respectively.
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