After a brief after-hours rise following its earnings beat yesterday, Barracuda Networks (NYSE:CUDA) indicated lower this morning and has tumbled 16.4% on more than 10 times average volume, as analysts soak up details on the firm's renewal rate.
On the company's earnings call, it guided to Q1 revenues of $90M-$92M (vs. consensus for $91.1M) and billings of $103M-$105M, along with non-GAAP EPS of $0.17-$0.19 (vs. consensus for $0.18).
For the full year, it's guided to revenue of $370M-$380M (vs. consensus for $376.3M), and EPS of $0.73-$0.78 (vs. $0.77 expected).
A declining renewal rate concerned analysts. Piper Jaffray noted the quarter was solid overall, but a renewal rate that fell to 89% from 92% (driven by a drop in multi-year appliance contracts as customers migrate to cloud solutions) is clearly concerning investors; it's lowered its price target to $29 from $32 (24% upside from yesterday's close). Morgan Stanley's Melissa Gorham adds U.S. revenue growth underperformed the total, and trims price target to $24 from $25.
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