Why Qualtrics (XM) Stock Is Exploding 30% Higher Thursday

Qualtrics International Inc XM shares are trading higher by 30.15% to $14.59 during Thursday's pre-market session after the company on Wednesday reported better-than-expected fourth-quarter adjusted EPS and sales results.

Qualtrics stock is also soaring higher Thursday after SAP SE SAP announced earlier that it's exploring a sale of the company's 71% stake in the software technology company.

SAP says this sale exploration would be a continuation of the strategy the company set at the time of the Qualtrics IPO in 2021.

SAP believes that this potential transaction could unlock significant value for both companies and their shareholders: for SAP, to focus more on its core cloud growth and profitability; for Qualtrics, to extend its leadership in the XM category that it pioneered.

What Happened?

Qualtrics reported quarterly earnings of 3 cents per share which beat the analyst consensus estimate of 2 cents. The company also reported quarterly sales of $389.10 million, which beat the analyst consensus estimate of $381.11 million by 2%. Additionally, this sales figure is a 23.12% increase over sales of $316.04 million in the same period last year.

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Qualtrics says the company sees Q1 2023 total revenue in a range between $392 and $394 million. Qualtrics also sees FY23 revenue as low as $1.661 billion or as high as $1.669 billion, versus the analyst consensus estimate of $1.69 billion.

"Qualtrics delivered solid results in Q4, capping off a very strong year of growth and significant operating margin expansion," said Qualtrics CEO Zig Serafin.

"Qualtrics continues to be critical to helping companies build deeper relationships with their employees and customers to increase revenue and operate more efficiently in a challenging market," Serafin stated.

Following the earnings report, Piper Sandler analyst Brent Bracelin maintained Qualtrics with an Overweight and raised the price target from $14 to $16.

According to data from Benzinga Pro, XM has a 52-week high of $32.81 and a 52-week low of $9.32.