Shares of Synchronoss fell 6.1% in Monday’s extended trading session after the company forecasted 2021 revenues that came in below consensus estimates. Meanwhile, the cloud messaging and digital solution and services provider reported better-than-expected 4Q results.
Synchronoss (SNCR) reported a non-GAAP net loss of $0.19 per share in 4Q, significantly narrower than the Street’s estimate of a $0.53 loss per share. However, the loss widened on a year-over-year basis from $0.06 reported in the year-ago quarter.
Revenues of $69.4 million topped analysts’ expectations of $67.7 million but declined 23.4% year-over-year. (See Synchronoss stock analysis on TipRanks)
Meanwhile, adjusted gross margin improved 580 basis points to 59.8%, mainly driven by efficient cost management. Adjusted EBITDA of $6.41 million was slightly lower than the year-ago quarter’s adjusted EBITDA of $6.49.
Synchronoss CFO David Clark said, “Our fourth quarter and year end results reflect progress with our continued focus on expanding both our gross and adjusted EBITDA margins. We are seeing the benefits of our cost management efforts, which allowed us to deliver comparable year over year adjusted EBITDA results despite top-line revenue pressures.”
Following the earnings release, Canaccord Genuity analyst Michael Walkley reiterated a Buy rating and price target of $9 (128% upside potential). In a note to investors, Walkley wrote, “Our positive investment thesis is based on the ongoing business transformation with management delivering profitable growth through recently signed tier-1 deals.”
Overall, the rest of the Street has a bullish outlook on the stock with a Strong Buy consensus rating based on 2 unanimous Buys. The average analyst price target of $7.75 implies upside potential of about 96% to current levels. Shares have lost about 13.6% over the past year.