Arlo Technologies Inc delivered better-than-expected sales in the fourth quarter as the cloud-based infrastructure and smart connected device provider saw an increase in service revenue and an 89% increase in the number of new paid account additions.
Meanwhile, shares of Arlo Technologies (ARLO) were up about 25% in pre-market trading today. Driven by operational efficiency, the company posted a net loss per share (EPS) of $0.08 during the fourth quarter, which was lower than analysts’ expectations of a net loss per share of $0.18.
Revenue decreased 6.2% year-on-year to $114.8 million, topping analysts’ estimates of $111.57 million. Gross profit jumped 79% year-on-year to $24.5 million.
For fiscal 2020, the company generated sales of $357.2 million, down from the $370 million posted in 2019. Diluted loss per share came in at $0.82, versus $1.42 in the comparable year-ago period.
Arlo Technologies CEO Matthew McRae said, “We closed out the year with an 89.1% year-on-year paid account growth. Looking forward, we expect to roughly triple our paid account additions in 2021 and reach one million paid accounts by this time next year.”
Looking ahead to 1Q, Arlo Technologies guided for revenue of between $70 million to $80 million and a net loss per share of $0.23 to $0.17. (See Arlo Technologies stock analysis on TipRanks)
Last month, BWS Financial analyst Hamed Khorsand raised Arlo Technologies’ price target to $10 (49.7% upside potential) from $8 and reiterated a Buy rating. Khorsand said, “Arlo introduced new cameras for the holiday shopping season could have resulted in better than expected 4Q sell through.”
According to TipRanks’ Smart Score system, Arlo Technologies gets a 7 out of 10, which indicates that the stock is likely to perform in-line with market averages.
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