Technology stock

Why Quotient Tech Stock Crashed Today

What happened

Shares of Quotient Technology (NYSE: QUOT) lost a lot of ground on Thursday morning, trading down 11% at 11:30 a.m. ET, against a 0.1% drop in the S&P500. The fall followed the marketer’s fourth quarter earnings release.

So what

Investors were disappointed with the latest reports from Quotient Technology, which offers consumer packaged goods companies a platform to help them market to their customers. The fourth quarter release was no different, although it contained some good news about the company.

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Quotient sales were up just 3%, a sharp slowdown from previous quarters. In its letter to shareholders, management said the lackluster results were due to supply chain challenges that convinced many packaged food companies to forgo promotions.

Still, it was shocking to see the company’s sales gains stagnate after climbing nearly 50% in Q2 and 12% in Q3. Quotient is still posting net losses as well.

Now what

Quotient expects financials to improve for most of 2022 as it cuts costs. Investors can track its gross profit margin to see if this strategy helps increase efficiency.

But revenues will take more than a year to recover from the hit they suffered with the loss of Albertsons – the second largest supermarket chain operator in North America – as a customer. Revenue will likely reach between $330 million and $345 million this year, management projects, compared to $521 million in 2021.

That prospect rattled growth-oriented investors who hoped Quotient would quickly return to setting sales records. Instead, the company will focus on strengthening its finances in 2022 while working to find more important customers in the online coupon space.

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