Shares of Akerna (NASDAQ: KERN) were down 11.4% during the extended trading session on March 21, after the software company reported mixed Q4 results.
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Revenues showed impressive growth, beating estimates; however, bottom-line results failed to impress, and significantly missed analysts expectations. Akerna is an enterprise software company that has created a global technology ecosystem for cannabis
Mixed Q4 Numbers
The company reported an adjusted loss of $0.63 per share, which fell short of the Street’s estimated loss of $0.14 per share. However, it was lower than the previous year’s loss of $0.67 per share.
Positively, revenues jumped 61% year-over-year to $6.63 million and exceeded consensus estimates of $6.15 million. The revenue growth reflects an 80% surge in software revenues to $6.2 billion.
Despite solid top-line growth, gross profit margin declined 800 bps to 58% during the fourth quarter.
CEO Comments
Looking ahead, Akerna CEO, Jessica Billingsley, commented, “Our clients are both getting larger and individually seeing both unit and sales transactions rise. As more of the industry runs on Akerna, we are well-positioned for expected new market expansion and US federal progress.”
She further added, “In the meantime, we continue to grow our CARR, grow the number and amount of transactions running on Akerna, and we continue to enhance our open ecosystem of solutions that can run either independently or in conjunction with our clients’ choice of our leading accounting and tax products including SAP, Microsoft, and Netsuite.”
Analysts’ Recommendation
The Wall Street community is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 2 Buys. The Akerna stock forecast of $3.75 implies 253.8% upside potential to current levels, at the time of writing.
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