Why investors should avoid LogMeIn Inc (NASDAQ: LOGM) stock today

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LogMeIn Inc (NASDAQ: LOGM) stock fell over 13.4% on Feb 15th, 2019 (as of  10:05 am GMT-5; Source: Google finance) on lower than expected forecasts. For the current quarter ending in April, LogMein expects its per-share earnings to range from $1.12 to $1.15. Analysts surveyed by Zacks had forecast adjusted earnings per share of $1.35. The company expects revenue to be in the range of $304 million to $306 million for the fiscal first quarter. Analysts surveyed by Zacks had expected revenue of $302.2 million. Adjusted EBITDA is expected to be in the range of $94 million to $96 million, or approximately 31% of non-GAAP revenue.

LogMein expects full-year earnings in the range of $4.90 to $4.97 per share, with revenue ranging from $1.25 billion to $1.26 billion. Adjusted EBITDA is expected to be in the range of $407 million to $412 million, or approximately 33% of non-GAAP revenue.

The Company closed the quarter with cash and cash equivalents of $148.7 million and $200.0 million of borrowings under its existing credit agreement. The company delivered adjusted EBITDA of $119 million or 38% of revenue and free cash flow of $69 million.

LOGM in the fourth quarter of FY 18 has reported the adjusted earnings per share of $1.47, beating the analysts’ estimates for the adjusted earnings per share of $1.41. The company had reported the adjusted revenue growth of 3.2 percent to $310.7 million in the fourth quarter of FY 18, beating the analysts’ estimates for revenue of $306.6 million.

During the year, the company returned 82% of our free cash flow to shareholders. In the fourth quarter, the company spent $57 million to repurchase 667,000 shares of our stock and paid $15 million on dividends. For the full year we paid $247 million to repurchase more than 2.5 million shares of the stock and paid $62 million in dividends. In 2018 the company had reduced the fully diluted shares outstanding by 4%. Regarding the Q1 2019 dividend, the company is increasing it by 8% to $0.325 per share, which the company will pay on March 12 2019 to stockholders of record as of February 25th, 2019.

Meanwhile, the company will undertake a global restructuring plan designed to streamline our organization and reallocate resources to better align with our growth acceleration goals.  The company expects to substantially complete this restructuring by the end of fiscal year 2019.  Upon completion of the plan, the company expects to achieve annualized cost savings of approximately $26 million.

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