) delivered disappointing third quarter results on October 24. The
company missed on both the top and bottom lines, prompting a flurry
of negative estimate revisions from analysts.
It is currently a Zacks Rank #5 (Strong Sell).
While shares of QlikTech have taken a beating since the Q3 report,
the stock still doesn't look cheap given the big drop in consensus
estimates. Investors should wait for earnings momentum to turn
around before jumping in.
QlikTech develops and sells the QlikView Business Discovery
platform, or QlikView. This software is used for business
intelligence (BI) and data analysis.
Third Quarter Results
QlikTech reported disappointing third quarter results on October
24. Adjusted EPS (which
stock-based compensation) came in at a loss of 5 cents, below the
Zacks Consensus Estimate calling for a loss of 2 cents.
Total revenue rose 21% to $104.1 million, but this was well below
the consensus of $108.0 million. The company experienced solid
growth in the Americas, but sales were weaker than expected in
Europe and Asia Pacific.
Stock-based compensation expense rose 56% year-over-year to $8.6
million. If you exclude this, EPS actually came in ahead of
consensus, but this was due in part to a large tax benefit.
Analysts revised their estimates significantly lower for both 2013
and 2014 after QlikTech's weak Q3 results. This sent the stock to a
Zacks Rank #5 (Strong Sell).
You can see the big drop in consensus estimates in the 'Price &
The 2013 Zacks Consensus Estimate is now $0.01, down from $0.17
before the Q3 report. The 2014 consensus is currently $0.15, down
from $0.34 over the same period.
Shares of QlikTech are down nearly 25% since the Q3 release. But
shares still don't look cheap given the big drop in consensus
estimates. The stock currently trades around 82x 12-month forward
earnings, well above the industry median of 23x.
Its price to tangible book ratio is a rich 9.9, but this is below
the peer group multiple of 11.
Investors still interested in the 'Business Software Services/BPO
Market' should consider
), which carries a Zacks Rank of 1 (Strong Buy) and trades at less
than 14x forward earnings, or
), which is a Zacks Rank of 2 (Buy) and trades at less than 20x
The Bottom Line
With falling earnings estimates and premium valuation, investors
should consider avoiding QlikTech until its earnings momentum
Todd Bunton, CFA is the Growth & Income Stock Strategist
and Editor of the
Income Plus Investor service
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