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What to Expect from Cloudera's Q1 Earnings as CLDR Stock Falls Further

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First quarter earnings season has been rough for the broader technology sector. Making matters worse, the escalating trade war between the U.S. and China has put more pressure on tech stocks and the market as a whole as investors run to safe havens. With that said, Q1 earnings season isn’t over and investors still need to know what to expect from quarterly financial results.

Quick Overview

Shares of giants like Amazon (AMZN - Free Report) and Facebook have fallen roughly 5% in May, to match the S&P 500’s decline. Meanwhile, Apple (AAPL - Free Report) stock has tumbled 16% on escalating U.S.-China trade war fears. It is still too early to know exactly how President Trump’s increased tariffs from 10% to 25% on $200 billion worth of Chinese products will impact the market. Plus, Trump has threated additional duties on what would amount to nearly all Chinese exports to the U.S. At the same time, China has promised retaliation.

A trade deal could still be reached despite the heightened tensions. Therefore, it’s time to take a step back and look at the first quarter as a whole, before we see what to expect from Cloudera. As of Wednesday, total earnings for the 483 S&P 500 members that had reported were up +0.2% on +4.7% higher revenues, with 76.8% beating EPS estimates and 59.0% beating revenue estimates.

Meanwhile, total earnings for the Tech sector (95.5% of Tech companies in the S&P 500 have reported) were down -6.9% from the same period last year on +2.6% higher revenues. Apple and semiconductor industry powers like Advanced Micro Devices (AMD - Free Report) , Micron (MU - Free Report) , were a huge drag on the sector (also read: Q1 Retail Sector Scorecard).

 

 

Cloudera Inc.

Cloudera provides cloud-based big data solutions and works with the likes of Intel (INTC - Free Report) and other big names in technology. CLDR’s open-source distribution platform enables efficient and secure data management and analytics. Investors should also note that the company officially completed its merger with enterprise data peer Hortonworks, Inc. in January to help create a more robust firm.

Like some of its tech peers, shares of Cloudera have plummeted in May, with CLDR down roughly 15% since the start of the month. Cloudera stock, which opened at $9.41 per share Thursday, is down over 16% in 2019. Part of the downturn was driven by a wider-than-projected Q4 loss.

Looking ahead, the Palo Alto, California-based firm’s Q1 fiscal 2020 revenue is expected to soar 83.3% to reach $188.29 million, based on our current Zacks Consensus Estimate—which includes anticipated benefits from the merger with Hortonworks. For reference, Cloudera’s Q4 revenue jumped 36.7% to crush our $121 million consensus mark.

At the bottom end of the income statement, CLDR’s adjusted quarterly earnings are projected to plummet 35.3% to a loss of $0.23 per share. Peaking ahead, the company’s full-year EPS figure is expected to pop 14.6% to -$0.35 a share.

Investors holding out hope for Cloudera might be pleased to see that the company’s fiscal 2021 earnings are expected to skyrocket 131% above our current year estimate to +$0.11 a share. Furthermore, The firm’s 2021 revenue is projected to jump 20.3% higher than our fiscal 2020 estimate as the year-over-year Hortonworks impact fades.

 


 

 

Bottom Line

Despite some high hopes for Cloudera stock, shares the cloud computing firm have fallen over 50% since the company went public in the spring of 2017. Yet, the firm is part of the booming cloud computing industry and might still be worth considering as a more speculative, home run-style tech growth play.

Cloudera is a Zacks Rank #3 (Hold) at the moment based on its earnings estimate revision activity. The firm does sport “A” grades for Growth and Momentum in our Style Scores system. CLDR’s price/sales ratio of 5.4 is not too stretched compared to its industry’s 4.2 average.

Cloudera is scheduled to report its first-quarter fiscal 2020 financial results after the market closes on Wednesday, June 5. Make sure to come back to Zacks for a complete breakdown of the firm’s actual results.

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