Investing

3 Tech Stocks That Destroyed Shareholders During Earnings Season

Chris Lange

Published: June 8, 2017 10:50 am

Last Updated: January 12, 2020 11:14 am

The broad markets are holding near their new highs after a fairly strong earnings season. Although the tailwind of the Trump trade has been incredibly strong, there are still companies holding back this rally. The summer doldrums are just arriving, and 24/7 Wall Street has picked out a few companies in the tech sector posting some of the largest losses from this past earnings season. Some of these companies hit new lows and have created huge shareholder losses.

We have included a little color on why each stock has lagged, as well as a recent trading history, consensus analyst price target and a 52-week trading range.

Akamai

When Akamai Technologies Inc. (NASDAQ: AKAM) released its first-quarter financial results back on May 2, earnings were better than expected. But looking at how the stock is performing, this is not the entire story. What tanked this stock was its guidance, given separately in the conference call. Also it did not help that analysts took this opportunity to cut their price targets on Akamai.

The company said that it had $0.69 in earnings per share (EPS) and $609.2 million in revenue, compared with consensus estimates from Thomson Reuters of $0.67 in EPS and revenue of $604.69 million. The same period of last year reportedly had EPS of $0.66 and $567.73 million in revenue.

In the conference call, management commented that it expects current quarter revenue to be in the range of $597 million to $609 million, which fell somewhat short of expectations. The consensus estimates for the second quarter were $0.65 in EPS and $623.02 million in revenue.

Shares of Akamai closed Wednesday at $48.46, with a consensus analyst price target of $62.68 and a 52-week trading range of $46.81 to $71.64. The company has a market cap of $8.4 billion. Since the earnings report was released, the stock is down over 20%.

Frontier Communications

Frontier Communications Corp. (NYSE: FTR) was among the worst performers of any S&P company in all of earnings season. On top of earnings and its dividends just never making any sense at all, the reality is that it did finally slash that dividend. The company reported its earnings on May 2 after the markets closed.

The company posted a net loss of $0.08 per share and $2.36 billion in revenue, compared with consensus estimates that called for a net loss of $0.05 per share and $2.34 billion in revenue.

Shares of Frontier closed most recently at $1.21, in a 52-week range of $1.19 to $5.24. The consensus price target is $2.14 and the market cap is $1.4 billion. Since the company reported earnings, the stock is down about 37%.

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9 Companies That Destroyed Shareholders This Earnings Season

Twilio

When Twilio Inc. (NYSE: TWLO) released earnings on May 2, its posted net loss of $0.04 per share on $87.4 million in revenue fell short of consensus estimates for a $0.06 per share loss and $83.6 million in revenue. During the quarter, the company recorded 40,696 active customer accounts, as of March 31, 2017, compared to 28,648 in the first quarter of last year.

While Twilio extended its Amazon Web Services pact, its largest customer is Uber and that is about 12% of Twilio’s revenue — and the company noted that Uber is taking over its messaging service and handling more of its software needs.

Shares of Twilio were last seen at $25.25, in a 52-week range of $22.80 to $70.96 and with a consensus analyst target of $32.90. The company has a market cap of $2.3 billion. Shares are down 25% since earnings were reported.