Why SendGrid Inc. Stock Jumped Wednesday

What happened

Shares of digital communication platform company SendGrid (NYSE: SEND) jumped as much as 14.6% on Wednesday, following its second-quarter earnings release. At the time of this writing, SendGrid stock is up about 13.1%.

The stock’s gain on Wednesday was likely primarily because SendGrid reported better-than-expected second-quarter revenue and non-GAAP earnings. In addition, SendGrid’s guidance for its third-quarter revenue was above a consensus estimate for the period.

Image source: Getty Images.

So what

SendGrid reported revenue of $35.7 million, up 32% year over year. On average, analysts were expecting second-quarter revenue of $34.4 million.

SendGrid’s non-GAAP earnings per share (EPS) improved from $0.01 in the year-ago quarter to $0.05 in Q2. On average, analysts were expecting non-GAAP EPS of $0.01 for SendGrid’s second quarter.

SendGrid CEO Sameer Dholakia said the results were “strong,” pointing to the company’s “accelerating sequential revenue growth, improving gross margins driving sharply higher profitability, and strong free-cash-flow generation.”

Now what

SendGrid said it now expects full-year revenue to be between $142.5 million and $144 million, representing 28% year-over-year growth. This compares to previous guidance for full-year revenue between $140.3 million and $142.3 million.

SendGrid’s guidance for third-quarter revenue between $35.9 million and $36.1 million was above a consensus analyst estimate for third-quarter revenue of $35.4 million.

10 stocks we like better than Sendgrid, Inc.
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now… and Sendgrid, Inc. wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of June 4, 2018

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

You May Also Like

About the Author: Over 50 Finance