- Wall Street slides lower after green opening
- US100 nears the important support level
- Guidewire Software and Smartsheet surge after results
US markets open Friday's cash session lower. Nasdaq is trending above key support level and losing the most, while the S&P500 is flat. Dow Jones is trying to not go into negative territory. Investor attention is fully focused on trying to react to payroll data.
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Current volatility observed on Wall Street. Source: xStation
Breakdown of the S&P 500 index by sectors. Source: Bloomberg Finance L.P
The Nasdaq-100 index, represented by the US100 contract, is declining for the fourth consecutive day. A key support level will be the 38.2% Fibonacci retracement at 18738, which is near the lower Bollinger Band. If it breaks, the next support level will be the 200 SMA at 18376 and the 23.6% Fibonacci retracement. For bulls to regain control, the resistance at the 50% Fibonacci retracement and 100 SMA around 19167 must be broken. This would also be above yesterday's high, a good starting point for now. The RSI is slowly trending lower, with the MACD showing bearish sentiment. Source: xStation 5
Company News:
- Smartsheet (SMAR.US) shares rose 4.6% in premarket trading after the application software company reported second-quarter results that beat expectations and raised its full-year forecast for adjusted earnings. Smartsheet's Q2 adjusted EPS of $0.44 significantly surpassed the estimated $0.30, while revenue of $276.4 million exceeded the expected $274 million. The company raised its full-year 2025 adjusted EPS guidance to $1.36-$1.39 from $1.22-$1.29 previously. Analysts noted that Smartsheet's enterprise focus continues to insulate its results relative to peers, despite lackluster revenue and ARR upside.
SECOND QUARTER 2025 RESULTS
- Adjusted EPS: $0.44 vs $0.30 estimate
- Revenue: $276.4 million (+17% y/y) vs $274 million estimate
- Subscription revenue: $263.5 million (+19% y/y) vs $260.4 million estimate
- Free cash flow: $57.2 million (+26% y/y) vs $50.3 million estimate
FISCAL YEAR 2025 FORECAST
- Adjusted EPS: $1.36 to $1.39 (raised from $1.22 to $1.29)
- Revenue: $1.12 billion (maintained)
- Net free cash flow: $240 million
- Salesforce (CRM.US) shares dipped 0.4% in premarket trading after the software company agreed to acquire data protection and management solutions provider Own for $1.9 billion. Analysts are broadly positive on the deal, seeing strategic merit in strengthening Salesforce's Data Cloud product, which has seen robust adoption. The purchase price represents a notable discount to Own's prior valuation of $3.3 billion. Salesforce expects the deal to be accretive on a free cash flow basis starting in the second year following closing, with no change to its fiscal year 2025 financial guidance or capital return program.
ACQUISITION DETAILS
- Purchase price: $1.9 billion
- Expected closing: Q4 of Salesforce's fiscal year 2025
- Accretion: Expected on FCF basis starting in second year post-closing
- No change to FY2025 financial guidance or capital return program
- Guidewire Software (GWRE.US) shares surged 7.7% in premarket trading after the property and casualty insurance software company reported fourth-quarter results that beat expectations and provided an outlook ahead of consensus on both revenue and adjusted operating profit. Guidewire's Q4 adjusted EPS of $0.62 surpassed the estimated $0.54, while revenue of $291.5 million exceeded the expected $284 million. The company's full-year 2025 revenue guidance of $1,135 million to $1,149 million also topped estimates.
FOURTH QUARTER 2024 RESULTS
- Adjusted EPS: $0.62 vs $0.54 estimate
- Revenue: $291.5 million (+8% y/y) vs $284 million estimate
- Subscription and support revenue: $151.8 million (+29% y/y) vs $149.2 million estimate
- License revenue: $88.9 million (-12% y/y) vs $85.8 million estimate
FISCAL YEAR 2025 FORECAST
- Revenue: $1,135 million to $1,149 million
- Total annual recurring revenue (ARR): $995 million to $1,005 million
- Adjusted operating income: $157 million to $171 million
- Operating cash flow: $220 million to $250 million
