2023-03-09 14:19:48 ET
Cloud-based security name Arlo Technologies ( NYSE: ARLO ) rose 11.6% by Thursday afternoon, tacking on to a stellar rise since the company beat expectations with its fourth-quarter earnings and issued an upbeat outlook for the start of 2023.
Arlo stock ( ARLO ) jumped a full 50% Wednesday, the day after its marked an after-hours gain following the Q4 print .
That marks a sturdy 68% rise since Tuesday's close. Thursday's volume is running hot, at just under 4.8M shares changing hands vs. a typical daily volume of 866,000 shares.
The results led Raymond James to reiterate its Outperform rating, noting it showed an acceleration of services strength alongside "tight operating cost control, driving revenue and operating margin above our expectations."
"We think Arlo is making the correct decision doubling down on expanding its services growth (expect ~45% y/y Services growth in 2023) at the sacrifice of product gross margin via discounting, as the higher margin recurring revenue provides visibility and potential valuation appreciation," analyst Adam Tindle said in reaction.
That strategic pivot should begin to show up in results in coming quarters, Tindle said, adding that there should be longer-term positives in "the recently security-related launches and programs like partnering with Citizens Pay to enable lower upfront monthly costs."
The firm is maintaining an $11 price target - which even after the 68% two-day move implies a further 84% upside.
For more detail, dig into Arlo's earnings call presentation and Seeking Alpha's ARLO earnings call transcript .
For further details see:
Arlo's new double-digit jump takes post-earnings gains to 68%