SurveyMonkey Slips Following Q4 Earnings

SVMK Inc SVMK reported fourth-quarter results, which were mostly in line with expectations. The company also announced COO and CFO Tim Maly will retire.

Shares closed Thursday down 15.7 percent at $11.85. Here is a summary of how some of the Street's top analysts reacted to the print.

Wells Fargo: 'Decent' Quarter, 'Mixed' Guidance

SVMK, also known as SurveyMonkey, delivered a revenue beat in the fourth quarter mostly due to the Teams plan launch and momentum in the enterprise business, Wells Fargo's Ivy Cong said in a research report. Management's first-quarter non-GAAP operating margin guidance of zero to 1 percent fell short of expectations as did the full year 2019 revenue guidance of $290 to $295 million.

Overall, Cong said the "decent" quarter is offset by a mixed outlook which also calls for additional investments to gain market share in the enterprise and international businesses and migration towards the cloud.

Cong maintains a Market Perform rating on SVMK with an unchanged $14 price target.

Related Link: SurveyMonkey Makes Impressive Debut On Wall Street

BofA: 'Solid' Quarter

SVMK's earnings report was "solid" based on a 7 percent growth in total paying users to 646,700 while 25,700 net customer additions exceeded expectations of 12,500, Bank of America's Brad Sills said in a research report. The enterprise business stood out with an 80 percent growth in new enterprise bookings from last year while the segment recorded its first $1 million annual contract value (ACV) deal.

Sills maintains at Buy, unchanged $16 price target.

Citi: Valuation Concerns

SVMK benefited from strong sales of SurveyMonkey Enterprise and new Teams products which essentially eliminates the ability for users to share accounts, Credit Suisse's Stephen Ju said in a research report. A strong focus on expanding the enterprise business should help boost annual recurring revenue rates by a factor of four times or more as relationships mature over time.

Management also detailed another driver of growth over the long term in international markets, which account for only 36 percent of revenue today. However, valuation concerns prevent a bullish stance on the stock.

Three factors would warrant a shift to a bullish rating, including: an ARR lift from enterprise customers of more than four times, better than expected growth in paid customers, and/or lower customer acquisition costs resulting in margin expansion.

Ju maintains at Neutral, price target lifted from $13.50 to $14.50.