By Josh Beckerman
Asure Software shares were recently down 21% after it said its guidance reflected factors including economic uncertainty while it reported strong third-quarter results.
The stock was recently at $6.76 and is down about 27% this year.
Revenue rose 34% and net loss per share narrowed to 10 cents. The company benefited from “robust gains in gross margins” and reported a favorable reception for a recently launched offering that bundles its 401(k) product with payroll services.
Asure said its guidance reflects “a high level of economic uncertainty in 2023 which may continue into 2024 due to recent inflationary trends and the potential for a recession of unknown severity and the Internal Revenue Service’s recent measures against fraudulent employee retention tax credit claims.” It expects revenue of $25 million to $27 million in the fourth quarter and $125 million to $129 million in fiscal 2024.
Lake Street Capital downgraded Asure to hold from buy. Stifel maintained its buy rating while lowering its price target to $12 from $15. Stifel noted that the company’s fiscal 2024 guidance reflects about $10 million to $15 million of inorganic growth from acquisitions. “As we view the timing of this inorganic growth as somewhat unknown, we exclude it from our model,” Stifel said. It said “we continue to believe that Asure is well positioned to benefit from tailwinds from Compliance/Market-Place/Secure Act 2.0.”
Write to Josh Beckerman at [email protected]
Read the full article here