Rumors of a potential sale have propelled the stock of SolarWinds Corp (NYSE: SWI) higher, as the software provider examines various options to enhance shareholder value.
A Company in Transition
SolarWinds Corp, controlled by investment firms Silver Lake Management and Thoma Bravo, has reportedly engaged financial advisors to assess strategic alternatives, including a possible sale. Sources familiar with the matter suggest that the sale process may commence in early 2024, causing considerable investor anticipation.
The software provider has steadily regained momentum after a significant setback in late 2020 when it fell victim to a cyber-attack tied to Russian hackers, compromising the data of thousands of its customers. Despite this setback, SolarWinds has demonstrated resilience and robust financial performance.
Strong Financial Performance
As of the second quarter of FY23, SolarWinds reported a revenue growth of 5% year-on-year, reaching $185 million, surpassing the consensus estimate of $179.5 million. Adjusted earnings per share (EPS) came in at $0.21, exceeding the consensus estimate of $0.17. Furthermore, the company projects a revenue range of $740 million to $748 million for FY23, surpassing market expectations of $734.18 million. The non-GAAP EPS outlook for FY23 is forecasted to be between $0.76 and $0.79, exceeding the consensus estimate of $0.73.
These strong financial figures underscore SolarWinds’ ability to weather challenges and, coupled with the exploration of strategic alternatives, have piqued investor interest.
Market Response
News of SolarWinds Corp evaluating a potential sale has sent the company’s stock soaring. On the latest check, SWI shares traded higher by 6.86% at $9.50, reflecting growing investor optimism.
Outlook
SolarWinds Corp’s investigation into strategic alternatives, including a potential sale, signals an exciting opportunity for investors and potential buyers alike. The company’s ability to adapt and deliver strong financial results demonstrates its resilience and potential for growth. The upcoming sale process, scheduled to begin in early 2024, will undoubtedly attract significant attention as stakeholders eagerly await further developments.
