One site for Breaking News, Politics, Sports, Entertainment & more!

Newz Chooze
Back

Shares of Arlo Technologies Inc. are down more than 40% in morning trading Wednesday after the company issued a far weaker-than-expected outlook. "We have been patiently waiting for indications of a reacceleration of growth with new product releases, and better indications that the subscription service was compelling enough to drive a sizable base of paid subscribers," wrote Raymond James analyst Adam Tindle. "We will need to be more patient as a channel inventory cleanup and resulting contra-revenue means significant year-over-year revenue declines through 1H19." He said that investors may see Arlo in "a race against the clock" as the company is burning cash at a roughly $100 million annual run rate while having about $200 million in cash on hand. While he would like the company to focus on introducing new services that can drive subscriptions, Tindle said the company instead seems focused on user acquisition, which is "clearly costly." He rates the stock at market perform. Shares have dropped 69% over the past three months, while the S&P 500 has fallen 1%. Arlo split from its former parent Netgear Inc. in an August initial public offering. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.