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Why Fleetmatics (FLTX) Is Plunging Today

NEW YORK (TheStreet) -- Fleetmatics (FLTX - Get Report) drops 8.71% to $36.47 at the close of the trading day on Friday, down $3.48 from its previous close of $39.95, after the GPS fleet tracking software maker announced its fourth-quarter results and issued guidance that came up short of analysts' expectations.

The company issued guidance of 14 cents to 16 cents a share for the first quarter, less than the consensus estimate of 25 cents from analysts polled by Thomson Reuters. For the full year, the company expects earnings of 80 to 85 cents a share. Fleetmatics expects revenue of $51 million to $52.5 million, while analysts expect $51.66 million.

For the fourth quarter, revenue increased 40% year over year to $50.1 million, while adjusted EBITDA rose 36% year over year to $16.1 million. Earnings per share were 42 cents, up from 14 cents in the same period one year earlier, while adjusted EPS was 23 cents, up from 19 cents in the same quarter one year ago.

FBR Capital Markets also reduced its target price on Fleetmatics to $42 from $50 and holds an "outperform" rating on the stock.

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TheStreet Ratings team rates FLEETMATICS GROUP PLC as a "hold" with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate FLEETMATICS GROUP PLC (FLTX) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the stock itself is trading at a premium valuation."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Powered by its strong earnings growth of 400.00% and other important driving factors, this stock has surged by 56.45% over the past year, outperforming the rise in the S&P 500 Index during the same period.
  • The revenue growth came in higher than the industry average of 10.6%. Since the same quarter one year prior, revenues rose by 39.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for FLEETMATICS GROUP PLC is currently very high, coming in at 82.17%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, FLTX's net profit margin of 12.04% significantly trails the industry average.
  • When compared to other companies in the Software industry and the overall market, FLEETMATICS GROUP PLC's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: FLTX Ratings Report

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