Mizuho stays at Neutral, $80 tgt on DATA ahead of the results as they expect total revs of $218-225mm (+52-57% Y/ Y) vs consensus of $201mm and guidance of $195-200mm. Inline with the last few qtrs, mgmt guided 4Q15 significantly below normal seasonality. Since 2Q14, co has posted results $10-19mm above the upper end of mgmt's outlook. They expect similar performance given strong momentum and increased sales force productivity. Firm expects EPS of $0.22-0.24 vs consensus of $0.16. Also, checks indicate rising competition which may impact co's sales cycle going forward, and they expect mgmt is likely to raise 2016 outlook.
With analysts giving them a pass and expecting the results to continue, IV cranked through the roof ($11 expected move) and with the rally today, I am a seller at these levels. The stock is sitting at a neckline for a longer term head and shoulders and I would not take my chances long here.
BIAS: STAY NEUTRAL OR HARD SELL
Warned subscribers in the room about DATA and their high P/E. The stock's future hangs/hung on year over year revenue growth. The issue needed to show Wall St. that that the last two quarterly declines in revenue were anomalies and it was our bias that that was not the case.
Reported Q4 (Dec) earnings of $0.33 per share, $0.18 better than the Capital IQ Consensus of $0.15; revenues rose 41.9% year/year to $202.8 mln vs the $200.66 mln Capital IQ Consensus.
- License revenue grew to $133.1 million, up 31% year over year.
- International revenue grew to $53.7 million, up 63% year over year.
- Added more than 3,600 new customer accounts.
- Closed 414 transactions greater than $100,000, up 36% year over year.
On the outside, this looks like a beat and a good report.
THIS REPORT SUCKS
This stock received a high multiple based on their growth. If you focus on their revenue rise (41.9%) it is 33% less than the last (2) quarters. This shows a shocking deceleration in growth and you see that displayed right now with the equity price (~34% decline). Hate to break it to you, but this high growth name is OVER.
If you're in the Feb/Mar 75 puts with us congrats. Use tomorrow as an opportunity to sell and lock your profits and look to roll out to march as the issue will more than likely touch it's IPO lows.