Shares of Procore Technologies took a hit in premarket trading as the construction software company reported a higher-than-expected third-quarter loss. This disappointing performance reflects the ongoing challenges faced by the building trade across the United States. As a result, one Wall Street firm downgraded its rating on the stock.
Financial Results: Q3 Loss Narrower Than Previous Year
Procore Technologies, known for its project-management software for construction firms, recorded a third-quarter loss of $43.8 million, or 31 cents a share. While narrower than the $71.2 million loss, or 52 cents a share, in the same period last year, it fell short of certain investors' expectations.
Share Price Decline
The news weighed heavily on investor sentiment, causing Procore's shares to drop by 18% to $49 in premarket trading.
Revised Revenue Projection
Despite the setback, Procore remains optimistic about its financial performance for the year. The company has revised its revenue projection for 2021, now forecasting a range between $937 million and $939 million. This is an improvement from the previous estimate of $908 million to $912 million.
In response to the earnings report, analysts at brokerage firm Jefferies downgraded their rating on Procore's stock from buy to hold. Additionally, they reduced their price target for the stock from $90 to $55.
Procore Technologies is navigating through a challenging period for the construction industry in the United States, as reflected in its Q3 financial results. However, with an adjusted revenue projection and ongoing efforts to improve performance, the company is determined to overcome these obstacles and deliver value to its shareholders.