SAN FRANCISCO (Reuters) – Three of Wall Store's top-performing IPO shares in 2019 tumbled late Thursday after the companies' quarterly results failed to satisfy investors and justify their high valuations.
FILE PHOTO: The Zoom Video Communications logo is pictured on the NASDAQ MarketSite in New York, New York, USA, April 18, 2019. REUTERS / Carlo Allegri
Zoom Video Communications ( ZM.O ) fell by 2% in expanded trading, even after the video conferencing provider's quarterly results and full-year outlook beat analysts' expectations.
The cyber security company Crowdstrike ( CRWD.O ) tumbled 8.7% after reporting better-than-expected results and providing positive quarterly guidance.
And the seller of the business software Medallia ( MDLA.N ) dropped 12.3% after the results also beat analysts' average expectations.
For a year marked by disappointing public quotes by Uber Technologies ( UBER.N ) and Lyft ( LYFT.O ), the stock performances of Zoom, Medallia and Crowdstrike have stood out since the IPOs. .
Prior to Thursday's post-fall decline, Zoom was up 157% from its original offering in April, Crowdstrike had risen 155% since it was released in June, and Medallia was up 74% from its July listing.
The sale on Thursday, even after losing companies beat consensus expectations, suggests that investors may be more concerned about high valuations.
"The strong pressure and weakness in stocks has been a new pattern," said Needham analyst Alex Henderson.
"Investors are leery of this market today, tomorrow and appear to be selling in strength, and will not let them ride, preferring to make profits," Henderson added.
Crowdstrike traded earlier on Thursday at about 85 times expected earnings for the next 12 months, while Medallia traded at a multiple of 37, according to Refinitive Data.
Zoom was converted to 38 times expected turnover over the next 12 months. On average, analysts do not expect Zoom to report a non-GAAP result before the quarter ending October 2020.
Both Zoom and Crowdstrike's year-over-year revenue growth was reduced as a public company from its first quarters. Zoom's sales growth slowed to 96% in the second quarter, from 103% in the first, while Crowdstrike's growth slowed to 94%, from 103%.
Uber has been down 28% since its IPO in May, which would have easily been the year's most anticipated. It is now regarded as the most disappointing, while Lyft has dropped 36% from the IPO in March.
The stock price of Slack Technologies Inc ( WORK.N ) more than doubled on its first trading day in a direct listing on June 19, but has fallen steadily since then. On Friday, Slack closed just 15% above the reference price used in the listing.
Reporting by Noel Randewich in San Francisco and Arjun Panchadar in Bengaluru; Editing by Richard Chang and Shailesh Kuber