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Sharecare Shares Dive 25% on Mixed Q4 Results & Muted FY2022 Outlook
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Sharecare Shares Dive 25% on Mixed Q4 Results & Muted FY2022 Outlook

Sharecare, Inc. (NASDAQ: SHCR) lost one-fourth of its market capitalization on March 31, after the company reported mixed Q4 results beating earnings estimates but falling short of revenues expectations.

Investors were further disappointed, after the company provided a sluggish outlook for FY2022 much below consensus estimates.

Based in the U.S., Sharecare is the leading digital health and wellness company that provides consumers with personalized information, programs, and resources to improve their health.

Q4 Results

The company reported an adjusted loss of $0.01 per share that remained flat year-over-year, but was 2 cents ahead of the Street’s estimated loss of $0.03.

However, revenues jumped 34% year-over-year to $118.5 million, but fell short of consensus estimates of $121.05 million.

Disappointingly, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) declined 30% to $5.4 million, compared to $7.8 million for the prior-year quarter. The EBITDA decline was driven by increased investments in the current period for both technology and sales force expansion, which will support growth and a reversal of temporary cost reduction actions in the prior year.

For the full year FY2021, the company reported revenue growth of 26% to $412.8 million. The company posted a loss of $0.04 per share, a slight improvement over the previous year’s loss of $0.05 per share.   

FY2022 Outlook

Management provided financial guidance for FY2022 based on Sharecare’s decision to suspend support for the COVID-19 vaccine assistant and health passport solutions, and transition of the PCMH business to a more tech-enabled model.

The company forecasts Q1 revenues in the range of $95 million to $98 million, far below the consensus estimate of $122 million. The company expects adjusted EBITDA to breakeven.

For the full year 2022, revenues are projected to be in the range of $470 million to $500 million, while adjusted EBITDA is likely to range between $30 million to $36 million.

CEO Comments

Looking ahead, Sharecare CEO, Jeff Arnold, commented, “Given the increased breadth of the Sharecare platform, in fiscal 2022, our sales and marketing efforts are focused on larger, more comprehensive digital platform opportunities. We believe this will accelerate our growth over the coming years, as well as enhance the value we deliver today to the nearly 10 million eligible lives on our platform.”

He further added, “With a strong balance sheet and a commitment to operational excellence, we are confident in our ability to deliver double-digit revenue growth in 2022 with the expectation of being free cash flow break-even by the end of the year.”

Wall Street’s Take

Despite the mixed Q4 results, BTIG analyst David Larsen reiterated a Buy rating on the stock with a price target of $10 (304.86% upside potential).

Overall, the Wall Street community is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on one Buy and one Hold. The average Sharecare price target of $9.75 implies a 294.74% upside potential to current levels.

Investors Sentiment

Contrary to dismal share price performance, TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Sharecare, with a whopping 30.7% of investors increasing their exposure to SHCR stock over the past 30 days.

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