Israel-based WalkMe Ltd. (NASDAQ: WKME) is well-established in the Software as a Service (SaaS) market. It provides cloud-based digital adoption solutions in the U.S. and globally.
With a market capitalization of $1.03 billion, the stock has recorded losses of 38.66% on a year-to-date basis.
Recently, WalkMe posted a lower-than-expected loss and upbeat revenues in the first quarter of 2022. Also, it provided a decent outlook for the June quarter and full-year 2022.
Despite the beat, shares of the company lost 3.7% in extended trading hours on Monday after closing 8.1% lower on the day.
Results in Detail
WalkMe registered an adjusted loss of $0.22 per share, compared with the Street’s estimated loss of $0.23 per share. The company reported an adjusted loss of $0.13 per share in the same quarter last year.
In other positive news, revenues surged 33% year-over-year to $56.8 million and came ahead of analysts’ expectations of $56.1 million. Subscription revenue stood at $51.4 million, up 34%.
However, adjusted operating loss was $18.6 million in the quarter, representing 33% of total revenue.
As of March 31, 2022, Annualized Recurring Revenue (ARR) grew 30% year-over-year to $230 million, while Remaining Performance Obligation (RPO) stood at $318 million, up 34%.
In the first quarter, the company added eight net new Enterprise-Wide DAP customers reaching a total of 134, which represented customer count growth of 52% year-over-year.
Encouragingly, WalkMe CEO Dan Adika said, “We advanced our partner program by expanding our relationship with HCL, and today we announced a strategic partnership with Celonis to advance our mission of connecting data, action, and experience. These relationships are a key pillar to our future growth and a signal to us of the growing momentum in our category.”
For 2022, the company projects total revenue in the range of $251 million to $255 million, representing year-over-year growth of 30% to 32%. The consensus estimate stands at $253 million. Adjusted operating loss is anticipated in the range of $78 million to $74 million.
For Q2 2022, total revenue is expected to land between $59 million and $60 million, representing a growth of 26% to 28% year-over-year. The Street’s estimate is pegged at $61.3 million. Adjusted operating loss is forecast in the range of $20 million to $19 million.
Wall Street’s Take
Consensus among analysts is a Strong Buy, based on five unanimous Buys. The average WalkMe price target stands at $26.20 and implies upside potential of about 114.75% to current levels.
TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), offers insight into WalkMe’s performance.
According to the tool, a website traffic uptrend was visible. In Q1 2022, total estimated visits on walkme.com showed an increasing trend, on a global basis, representing a 47.19% jump from the fourth quarter and 71.29% year-over-year.
The predictions that were based on TipRanks’ website visits data turned out to be correct, with WalkMe reporting strong subscription revenues in Q1 2022.
In the current era of digital transformation, WalkMe’s digital adoption solutions are gaining momentum. Therefore, based on strong results, decent outlook, recent stock price performance, and high analyst ratings, investors may consider adding the stock to their portfolio.
Learn more about the Website Traffic tool in this video by Youtube sensation Tom Nash.
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