WORK - 3 Reasons Slack Technologies Stock Plunged More Than 20% This Month
Despite reporting better-than-expected fiscal second-quarter results and raising its full-year guidance in early September, Slack Technologies (NYSE: WORK) stock plunged by 14% the following day. And in less than two weeks, the company's valuation had dropped by more than 20% this month. Here are three reasons for such a steep drop.
By Sept. 1, Slack's share price had increased 90% from its March lows to $34.30, bringing the company's enterprise value-to-sales ratio to 26.5. That lofty valuation indicated the market hoped for a spectacular increase in the use of the Slack's cloud-based communications platform despite the broad economic uncertainty.
Less-than-stellar fiscal second-quarter results, while still above management's guidance, failed to support the company's stock price.