Cloudera down 33% near all-time low premarket after guiding Q1 and FY19 revenue below consensus: Color on Quarter
- CLDR -33% at five-month low premarket
- JP Morgan downgrades to Neutral; tgt to $16 from $23
- Deutsche Bank downgrades to Hold
- Mizuho lowers their CLDR tgt to $23 from $24. Cloudera reported results above consensus, however, full-year guidance missed by a wide margin. Execution issues are likely to weigh on n-t bookings performance and it remains to be seen if the co's attempts to re-focus on expansions drive a rebound in bookings in the back half of the year. While the issues are real, they see these as growing pains as the company scales.
- Needham lowers tgt to $22 from $26. Their read on CLDR was generally correct, as the co posted strong 4QFY18 results, beating consensus on all metrics. The shortfall in the outlook relates to the type of customer CLDR has added, as this new cohort appears unlikely to match historical net expansion rates, and guidance effectively foreshadows a dramatic slowdown. While they think the shares are likely to mark time in the near term, given the after-hours price of ~$16.25, there remains sufficient potential upside to justify a BUY rating. In their view, CLDR's analyst meeting on April 12th will be critical.
- Stifel cuts tgt to $19 from $24. Cloudera posted solid 4Q results, but the good news ended there as FY19 guidance came in significantly below consensus estimates. Mgmt chalked up the weak guide to lower-than-expected 4Q bookings resulting from weak net expansion activity as well as Cloudera allocatinga disproportionate amount of resources to landing net new accounts outside of its core market that lack strong future growth potential . While they believe the strategy mgmt laid out to correct these issues is sound, these dynamics will weigh on Cloudera's near-term results and put shares in the penalty box until the co can demonstrate more consistent execution. They believe current valuation and Cloudera's long-term market opportunity present a long-term opportunity.