Stock Track | Clearfield Stock Plummets 5% as Q1 Outlook Disappoints, Despite Positive Long-Term Growth Prospects

Stock Track11-08

Shares of Clearfield Inc. (CLFD) plunged 5.08% on Wednesday after the company reported its fiscal fourth-quarter and full-year 2024 results, which were overshadowed by a disappointing outlook for the first quarter of 2025.

For the fourth quarter ended September 30, 2024, Clearfield reported revenue of $46.8 million, a 6% decrease from the same period last year. However, the company beat analysts' expectations, as its revenue surpassed the consensus estimate of $41.95 million. Net sales in North America stood at $35.7 million, while international net sales were $11.1 million.

Despite the year-over-year decline in revenue, Clearfield generated positive cash flow from operations of approximately $12.9 million in the fourth quarter and $22.2 million for the full fiscal year 2024. The company attributed this positive cash flow to a reduction in net inventory.

While Clearfield's fourth-quarter performance surpassed expectations, investors were concerned about the company's guidance for the first quarter of fiscal 2025. Clearfield expects revenue to range between $33 million and $38 million and anticipates a net loss per share of $0.28 to $0.35. This conservative outlook reflects some level of caution in capital spending by service providers, impacting the company's growth outlook in the near term.

However, Clearfield remains optimistic about its long-term growth prospects, particularly in the rural broadband expansion segment. The company has introduced several new products, including SeeChange and the CraftSmart series, aimed at reducing deployment costs and skilled labor requirements. Clearfield believes these innovative solutions position the company well to capitalize on opportunities arising from public and private funding initiatives for rural broadband expansion.

"We are excited about the opportunities from public and private funding for rural broadband expansion, which aligns with our long-term commitment to rural communities," said Cheryl Beranek, CEO of Clearfield. "While we anticipate a slow start to fiscal 2025, we expect growth to accelerate with the impact of BEAD funding in 2026."

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