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Investors had a topsy-turvy day on Tuesday, with the stock market initially soaring on news that consumer price inflation cooled off in November. Yet after a more than 700-point rise for the Dow Jones Industrial Average (^DJI 0.30%) early on, gains faded throughout the day, although the S&P 500 (^GSPC 0.73%) and Nasdaq Composite (^IXIC) still finished with gains at or near the 1% mark.
Index
Daily Percentage Change
Daily Point Change
Dow
+0.30%
+104
S&P 500
+0.73%
+29
Nasdaq
+1.01%
+113
Data source: Yahoo! Finance.
This week has a fairly light schedule of companies announcing their latest financial results, but there were a couple of stocks that saw sizable moves in after-hours trading following their release of quarterly reports. Both ABM Industries (ABM -0.13%) and Braze (BRZE 2.41%) lost ground after telling their shareholders about their recent performance. Below, you’ll learn more about both stocks and what they had to say to investors Tuesday.
Shares of ABM Industries were down about 3.5% in after-hours trading late Tuesday. The provider of facility solutions for airports, schools, hospitals, commercial buildings, and other spaces reported fiscal fourth-quarter financial results for the period ending Oct. 31 that featured modest gains but pointed to potential challenges ahead.
ABM’s quarterly numbers were solid. Revenue of $2.01 billion was up 19% year over year, with acquisitions being responsible for the bulk of the top-line growth. Organic revenue rose 6%, with strength in ABM’s technical solutions and aviation segments. Adjusted net income of $59.4 million rose 2% from year-ago levels and worked out to $0.89 per share, as higher interest expense figures weighed on profit growth.
More broadly, ABM has plans to keep broadening its business with a cloud-based enterprise-resource planning system and workforce management tools. By getting more involved in digital transformation, ABM hopes to tap into a bigger addressable market and boost margins. Moreover, the acquisition of customized micro-grid solutions provider RavenVolt could also expand ABM’s customer base and open up cross-selling opportunities.
ABM’s guidance for fiscal 2023 wasn’t entirely upbeat, with labor-related pressures holding back the business. Adjusted earnings next year of $3.40 to $3.60 per share would be slightly below the final figure of $3.66 per share for the just-completed fiscal year 2022. Even as shareholders had some doubts, though, ABM remains confident in its longer-term strategic vision.
Shares of Braze were down about 2.5% late Tuesday in after-hours trading, giving back gains from the regular trading session. The customer-engagement platform provider’s third-quarter financial report for the period ending Oct. 31 didn’t entirely live up to expectations despite showing ongoing strong growth.
Braze saw impressive top-line growth, with revenue climbing 46% year over year to $93 million. Subscription-based revenue for the software as a service (SaaS) stock grew at an even faster 50% annual rate, and Braze sported remaining performance obligations of more than $408 million at the end of October. Adjusted losses narrowed slightly to $0.15 per share.
Braze’s business metrics were solid. Dollar-based net-retention rates came in at 126%, matching year-ago levels. The company now sports more than 1,700 customers, including 148 generating annual recurring revenue of at least $500,000. With big business wins from clients like sports-betting company FanDuel and fast-casual restaurant chain Panera Bread, Braze is building up momentum in its core business.
Investors can’t expect profits in the near term, though, with projections for the full 2023 fiscal year coming in with losses of $0.68 to $0.69 per share on revenue of $352 million to $353 million. Braze has a track record of giving slightly downbeat guidance, but its stock performance over the past month shows some investors seem to think the company might finally be in a position to rebound from steep losses in 2022.
Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool recommends Braze. The Motley Fool has a disclosure policy.
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