Cloudera (CLDR - Free Report) shares have skyrocketed 90% since March 18 as Wall Street clamors for stocks that appear immune from the coronavirus economic downturn. Investors will now turn their attention to CLDR’s first quarter fiscal 2021 earnings results that are due after the market closes on Wednesday, June 3 to help figure out if it can continue its impressive climb.
The Simple Story
Cloudera is an enterprise data cloud firm that completed its merger with big-data peer Hortonworks in January 2019. The firm boasts that it can “transform complex data into clear and actionable insights,” and its newer Cloudera Data Platform is available on Microsoft’s (MSFT - Free Report) Azure Marketplace. This should help provide Cloudera solid exposure as MSFT is one of the largest cloud computing players, alongside Amazon (AMZN - Free Report) .
That said, Cloudera has largely struggled since going public in April 2017, amid a growing shift to the public cloud. And its stock tumbled last June after it announced that its CEO would retire. Cloudera did then reach an agreement with activist investor Carl Icahn in August of 2019.
The famed investor hoped to help the company turn a new leaf. And in January 2020 Rob Bearden took over as chief executive after previously co-founding and running Hortonworks.
CLDR topped our fourth quarter fiscal 2020 estimates in March, with the company’s annualized recurring revenue up 11%. Cloudera’s new CEO said on its Q4 earnings call that it “will transform from a mostly on-premise enterprise data management vendor to a true hybrid multi-cloud data platform company… CDP Public Cloud services will reflect our competitive advantage in addressing the full lifecycle of data.”
Cloudera stock has soared 90% since the middle of March to blow away stay-at-home standouts such as Zoom (ZM - Free Report) and Netflix (NFLX - Free Report) . CLDR was also up 4% through late afternoon trading Friday, which could mean Wall Street is expecting good things from its upcoming report. The stock is currently trading below its 52-week highs at around $10 per share, after sinking underneath $6 during the coronavirus selloff.
Alongside its cheap price, Cloudera’s valuation picture appears solid compared to its industry. CLDR is trading at 3.3X forward 12-month sales estimates. This marks a discount compared to its industry’s 7.5X average and is not too far off its own one-year median.
Our Zacks estimates call for CLDR’s first quarter fiscal 2021 revenue to pop 8.6%. Better yet, Cloudera is projected to jump from an adjusted loss of -$0.13 a share in the year-ago period to +$0.01. This positive bottom-line trend appears even stronger for fiscal 2021 and 2022.
Cloudera’s overall bottom-line outlook has also turned far more positive over the last 90 days, and it has topped our quarterly earnings estimates by an average of 95% over the trailing four periods. Therefore, some investors might want to take a chance on Cloudera, which is a Zacks Rank #3 (Hold), in the hopes that it will continue its coronavirus climb.
However, a pullback could be in order given its massive run, and longer-term investors might want to look elsewhere since Cloudera has failed to convince Wall Street of its ability to thrive within the broader cloud computing space—the stock is down 53% in the last three years.
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