Here’s why Telos shares fell today

What happened

Actions of Telos (NASDAQ: TLS) fell this morning after the company released its third quarter 2021 results. The cybersecurity firm reported earnings that were not in line with analysts’ estimates, and management also lowered its guidance for the full year.

Tech action was down 24% as of 11:40 a.m. EST Monday.

So what

Telos said its reported sales grew 48% in the third quarter year-over-year. The company also said its adjusted earnings per share was $ 0.10 in the quarter, which was just below analysts’ consensus estimate of $ 0.11.

Image source: Getty Images.

CEO John Wood said in a press release that he was satisfied with the performance for the quarter. “In addition, we increased the gross margin by 229 basis points to 37%, generated $ 12.5 million in positive operating cash flow and continued to win and retain significant contracts,” said Wood.

But despite those results, the company lowered its full-year revenue forecast from the previous range of $ 283 million to $ 295 million to the current range of $ 240 to 245 million.

Management also lowered its annual forecast of earnings before interest, taxes, depreciation and amortization (EBITDA) to a range of $ 18 million to $ 19 million, from previous guidance of $ 33 million to $ 36 million. .

Now what

Investors never like to see a company lower its revenue and profit estimates, which is why Telos shares fell so sharply this morning. Additionally, the company’s missed third quarter earnings added to investor disappointment.

Telos investors have been on a wild ride over the past 12 months, with the stock making massive gains, only to then see them disappear quickly. Today’s drop leaves Telos shares down 11% from a year ago.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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