Dj Cfo Kempton Surrenders 3097 Of Smith Micro Software Inc >Smsi

Smith Micro Software Inc SMSI reported a third-quarter 2024 non-GAAP loss of 30 cents per share against earnings of 8 cents in the prior-year quarter. The bottom line was narrower than the Zacks Consensus Estimate of a loss of 31 cents.

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Revenues in the quarter totaled $4.6 million, which missed the Zacks Consensus Estimate by 3.2%. Despite innovative product launch strategy and cost-cutting initiatives, revenues plunged 58% year over year due to continued downtrends across various revenue segments.

Smith Micro Software, Inc. Price, Consensus and EPS Surprise

Smith Micro Software, Inc. price-consensus-eps-surprise-chart | Smith Micro Software, Inc. Quote

In the reported quarter, the Family Safety segment’s revenues declined nearly $5.2 million or 57% to $3.9 million from the prior-year level. This downside resulted from the conclusion of the Verizon Family Safety contract in the fourth quarter of 2023, due to which no revenues were generated from this segment. Also, persistent weakness in Sprint Safe & Found revenues had an adverse impact.

CommSuite segment’s revenues decreased roughly 14.3% year over year to $0.6 million. On a sequential basis, CommSuite sales increased $0.1 million, driven by healthy subscriber engagement on the Boost CommSuite premium visual voicemail platform. This is likely to benefit the fourth quarter as well, added SMSI.

Revenues from the ViewSpot segment fell $1 million year over year to $0.1 million, mainly due to the termination announcement of the ViewSpot deals.

Following the announcement, shares are down 12.2% in the premarket trading session today. In the past year, shares have lost 86.3% against the subindustry’s growth of 21.7%.

Smith Micro Software, Inc. (SMSI) came out with a quarterly loss of $0.30 per share versus the Zacks Consensus Estimate of a loss of $0.31. This compares to earnings of $0.08 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 3.23%. A quarter ago, it was expected that this company would post a loss of $0.35 per share when it actually produced a loss of $0.38, delivering a surprise of -8.57%.

Over the last four quarters, the company has surpassed consensus EPS estimates just once.

Smith Micro Software, which belongs to the Zacks Computer - Software industry, posted revenues of $4.65 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 3.17%. This compares to year-ago revenues of $11 million. The company has not been able to beat consensus revenue estimates over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Smith Micro Software shares have lost about 86.4% since the beginning of the year versus the S&P 500's gain of 25.5%.

What's Next for Smith Micro Software?

While Smith Micro Software has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Smith Micro Software: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.14 on $5.6 million in revenues for the coming quarter and -$1.28 on $21.3 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Computer - Software is currently in the top 19% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One other stock from the same industry, Intuit (INTU), is yet to report results for the quarter ended October 2024. The results are expected to be released on November 21.

This maker of TurboTax, QuickBooks and other accounting software is expected to post quarterly earnings of $2.36 per share in its upcoming report, which represents a year-over-year change of -4.5%. The consensus EPS estimate for the quarter has been revised 0.1% higher over the last 30 days to the current level.

Intuit's revenues are expected to be $3.14 billion, up 5.4% from the year-ago quarter.

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