Author Archives: Scalper1

Zendesk Gains Traction In Enterprise As Q1 Revenue Beats

Zendesk ( Z ) stock jumped after the provider of customer-support software to retailers reported a smaller-than-expected Q1 loss and raised its full-year 2016 revenue guidance. Zendesk stock was up more than 8% in early trading in the stock market today , near 25, and breaking out of a cup-with-handle base at a 23.87 buy point in heavy volume. San Francisco-based Zendesk said it lost 8 cents per share minus items, vs. analysts’ estimate of a 10-cent per-share loss. Revenue rose 62% to $68.5 million, topping views of $66 million. “Zendesk finished Q4 with over 75,600 customer accounts, up from 69,000 last quarter, representing a record 6,600 customer additions,” said Pacific Crest analyst Brendan Barnicle in a research report late Tuesday. “As a result, customer acquisition costs and return on acquisition costs improved in Q1 over Q4.” For 2016, Zendesk forecast revenue  of $302.5 million at the midpoint of its guidance range, which would be up 45%, and is $7.5 million above its earlier guidance of $295 million. Zendesk provides a cloud-based customer service software platform. In November, it announced a partnership with Microsoft ( MSFT ). Zendesk competes with Salesforce.com ( CRM ), Freshdesk and Desk.com. Zendesk is gaining traction in the enterprise market, says Bhavan Suri, an analyst at William Blair. “Zendesk signed 50% more deals with average contract value of more than $50,000, and the average deal size for these transactions increased 30% year-over-year — a clear indication of the company’s success in the enterprise market,” Suri wrote in a research report. However, Zendesk has only a so-so IBD Composite Rating of 64 out of a possible 99. IBD’s Computer-Software Enterprise group ranks just No. 126 out of 197 groups. Zendesk’s stock had plunged on Feb. 5 amid a broad sell-off in tech stocks amid concern over China’s slowdown, tech spending and falling oil prices.

IBD 50: Ligand Pharma Beats Q1 Estimates, Buys Device Royalties

Ligand Pharmaceuticals ( LGND ), an  IBD 50 stock, rose early Wednesday after the small biopharma beat Q1 estimates and announced an acquisition that helped lift its guidance. Ligand reported earnings  excluding one-time items of 97 cents a share, more than triple the year-earlier number, beating analysts’ consensus by 30 cents, according to Thomson Reuters. Revenue rose 103% to $29.6 million, topping consensus by about $3 million. As described in a recent IBD  New America  story, Ligand’s business model is based on developing or acquiring technologies used in drug development and partnering with larger biotechs and pharmas that can make them into commercial products. Much of the growth in Q1 revenue came from the timing of milestone payments, along with the January acquisition of Open Monoclonal Technology, which licenses its biotech platform to drug developers. Ligand’s royalty payments grew thanks to the continued ramp of Amgen ’s ( AMGN ) blood-cancer drug Kyprolis and Novartis ’ ( NVS ) low-platelet treatment Promacta. Ligand also said it had agreed to pay $17.5 million for royalties on multiple programs from CorMatrix Cardiovascular, a privately held company that sells devices that help regrow human tissue. Ligand is guaranteed a minimum payment of $2.75 million annually, but says this is expected to double over time as CorMatrix rolls out new products. “CorMatrix’s existing and pipeline medical devices address market opportunities estimated to exceed $1 billion annually,” Ligand said in its press release . Ligand added $2 million to its 2016 revenue guidance, of which $1 million was expected to come from CorMatrix, bringing the range to $115 million to $119 million. That was still on the low side of Wall Street’s average estimate of $118.5 million, but EPS guidance beat Wall Street, at $3.41 to $3.46. Last year, the company made $3.37 a share on $71.9 million in revenue. It also guided 2017 slightly below consensus, with $160 million and EPS of $5.03. Ligand stock was up 2% in early trading on the stock market today , near 122. The stock is No. 18 on the current IBD 50 list of top-performing names over the past 12 months, with a strong Composite Rating of 93 despite somewhat light trading volume.

Zillow Stock Jumps On Revenue Outlook, Litigation Costs Rise

Zillow ( Z ) stock jumped after the online real estate portal reported first-quarter revenue that topped views and raised its full-year, 2016 sales forecast. The Internet company posted a loss of 13 cents a share, excluding items, compared with earnings of 2 cents a share a year earlier. Zillow stock, which has been highly shorted, jumped nearly 13% in premarket trading in the stock market today . The online real estate data provider said quarterly revenue rose 14% from a year earlier to $186 million vs. consensus estimates of  $177 million. Seattle-based Zillow forecast second-quarter revenue in a range of $203 million to 208 million. Analysts polled by Thomson Reuters had modeled $193 million. Zillow upped full-year 2016 revenue guidance to $830 million at its midpoint, from its earlier forecast of $810 million vs. consensus of $806 million. “ Zillow has meaningful opportunities for upside to both estimates and multiple as it better monetizes the massive, high value audience that it has built around its platform,” said Heath Terry, a Goldman Sachs analyst in a report. “Aggregated unique visitors across Zillow properties reached 156 million in Q1 vs. 124 million in Q4.” Zillow said it expects litigation expenses to reach $50 million to $55 million for the full year, compared with prior expectations of $36 million. It’s involved in litigation with News Corp. ( NWS ) and the National Association of Realtors. “Zillow appears to have pricing power. We have lingering concerns about this name, including valuation, the ultimate total addressable market, and potential fallout from litigation,” said Thomas Champion, an analyst at Cowen & Co. “However, Zillow appears to have re-established a cadence of beat-and-raise results while hitting the seasonally strong period of the year.” Zillow has an IBD Composite Rating of 65 out of a possible 99. IBD’s Internet-Content group is ranked No. 59 out of 197 industry groups.