LTCH - Here's Why Latch Stock Was Down 33% in May
Shares of property-technology company Latch (NASDAQ: LTCH) were down 33.1% in May, according to data provided by S&P Global Market Intelligence . The company reported financial results for the first quarter of 2022 on May 5, highlighting ongoing concerns. Then on May 20, Latch's management made a drastic move to preserve cash, further underscoring the bear case with the stock right now and leading to its underperformance for the month.
Latch is a small property-technology company. The business consists of a smart-lock hardware device (with a low profit margin) and its operating-system software (with high margins). The company had guided for first-quarter revenue of $12.7 million to $14.8 million, and it made good on this guidance by reporting quarterly revenue of $13.7 million. Moreover, software revenue of $3 million exceeded guidance and motivated management to raise full-year software revenue guidance.
Because its software revenue will be the driver of its future free cash flow , you might have expected the market to celebrate this development from Latch. But its business is simply behind schedule and has a deteriorating financial situation as a result.
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Here's Why Latch Stock Was Down 33% in May