Author Archives: Scalper1

Tableau, Qlik With Better Tools Should Survive Microsoft Power BI

Brave enough to venture into Gartner’s Business Intelligence & Analytics Summit, William Blair analyst Bhavan Suri is convinced Tableau Software ( DATA ) and Qlik Technologies ( QLIK ) will survive the price pressure wrought by Microsoft’s Power BI, and that both remain acquisition candidates. Sound like a Powerball lottery gamble? Microsoft ( MSFT ) offers Power BI business intelligence software for free to 1 gigabyte users and for $9.99 a month for 10-gigabyte users subscribing to Power BI Pro. Cisco Systems ( CSCO ) spent five years analyzing business intelligence products before settling on Qlik, consolidating its data from Oracle ( ORCL ), open-source Hadoop and Teradata ( TDC ) into QlikView and creating a dashboard that made it easy to see actionable intelligence, Qlik says. “Although Power BI appears to be gaining traction faster than we expected, we believe that Tableau and Qlik remain the clear leaders from a technology standpoint and continue to witness healthy deal activity,” William Blair’s Suri said in a research note Monday. “While we intend to watch the competitive situation closely, we maintain our outperform ratings on Tableau and Qlik, based on our view that both can still deliver growth in a world where Power BI sees success, continue to be attractive acquisition candidates, and currently trade at a comfortable discount to intrinsic value.” Qlik stock was up 2% in afternoon trading in the stock market today , near 27.50, after shares last month touched a five-year low below 16. Tableau stock was down a fraction Monday afternoon, near 43.50 and more than 65% off the record high of 131.34 it touched last July. But its shares are 19% higher since touching an all-time low of 36.86 on Feb. 8, following their infamous 49.5% dive after the company missed Wall Street estimates with its earnings and outlook, sending other enterprise software stocks tumbling. Microsoft was up a fraction Monday afternoon. “Despite increasing competition in the space, we view both companies (Qlik and Tableau) as well positioned to deliver double-digit growth for the next few years and significant margin expansion longer-term,” said Suri. “At 2.8 times and 2.6 times our calendar 2017 revenue estimates, respectively, we view Qlik and Tableau as being attractively valued.” He put the average price of business analytics stocks at 2.7 times estimated 2017 revenue and the median at 2.6 times. The group includes Qlik, Tableau, Hortonworks ( HDP ), Datawatch ( DWCH ), Micro Strategy ( MSTR ), New Relic ( NEWR ), PROS Holdings ( PRO ), Splunk ( SPLK ) and Teradata.

Sunrun Unveils Tesla-Backed Storage In Net-Metering Rattled Hawaii

No. 2 residential solar installer Sunrun ( RUN ) could trigger Hawaiian solar growth with a Tesla Motors ( TSLA ) battery-backed storage offering following regulators’ 2015 decision to cut net-metering subsidies, a Credit Suisse analyst said Monday. And despite a bulkier subsidy cut in Nevada that doesn’t grandfather in existing customers, Sunrun will flare on its impressive access to capital, Credit Suisse analyst Patrick Jobin wrote in a research report. Jobin retained an outperform rating and 21 price target on Sunrun stock. Sunrun stock was up a fraction in afternoon trading on the stock market today , while shares of No. 1 installer  SolarCity ( SCTY ) were down 1%. IBD’s 21-company Energy-Solar industry group was down nearly 1%, after falling 1.5% Friday. It ranks No. 54 out of 197 groups tracked. Year to date, Sunrun and SolarCity stocks are down a respective 43% and 47%, under-performing the industry group that has fallen 22% on continued volatility in Nevada despite Congress’ late December extension to a key federal subsidy. Still, “industry dynamics continue to favor Sunrun and SolarCity and highlight increasing barriers to entry,” Jobin wrote. “Further, we were impressed with Sunrun’s ability to outmaneuver peers in the capital markets.” Jobin sees a 214% upside to Sunrun stock. Sunrun, SolarCity Curb 2016 Growth In Q4, Sunrun guided to 40% growth in 2016 vs. consensus expectations for 60%-80% growth, echoing SolarCity, which earlier indicated 44% growth vs. traditional annual growth of 80%. But Sunrun and SolarCity differ in their rationale. SolarCity is aiming to become cash flow positive. Sunrun is focusing on cost reductions and maximized returns and, this month, guided to a 15% year-over-year reduction in 2016 for its channel business . Instead, Sunrun now expects to double its direct business over the course of 2016. “The company is on the fastest path to reaching the ‘Holy Grail’ of residential solar leasing companies whereby the third-party capital can cover all upfront costs,” Jobin wrote. Sunrun also unveiled a solar-plus-storage solution coined BrightBox to reinvigorate Hawaiian solar growth, after the state suspended payments to solar customers for excess energy fed back into the grid. The state was at 17% solar penetration when that vote came down. Firms like SunPower ( SPWR ), SolarCity, SolarEdge ( SEDG ) and Sunrun have long worked to make solar storage economical. Without it, utilities must buy the excess energy fed back into the grid. In 2015, however, Nevada and Hawaii cut net-metering payments to solar customers. Within a day, SolarCity and Sunrun said they would exit Nevada, the latter threatening to file suit. Now, Sunrun has managed to reduce its solar storage costs by 50% year over year, Jobin wrote. BrightBox customers are expected to reduce their utility bills by 15%. “The adoption of solar plus storage, if economic, can mitigate the risk in other states if utilities degrade the economics of net-metered energy,” he wrote. And “a solar plus storage solution in Hawaii should allow growth to resume.” In Hawaii, neighborhood constraints have restricted new customers from adopting solar. The BrightBox solution circumvents those restrictions, allowing Sunrun to tap into the remaining 83% of the state without solar.

Yahoo Facing A ‘Take Under’ As Facebook Deal Rumored, Products Cut

Yahoo ( YHOO ) could be facing a “take-under” — a buyout price lower than market value — from any of a number of private equity firms that might then dismantle the troubled Web company, an analyst said Monday. Private equity groups including Silver Lake, TPG and Blackstone might be interested in Yahoo, Rosenblatt Securities said in a research note. Yahoo has been looking at potential buyers while it pares costs, as the company has struggled to re-spark growth. “Yahoo did not get any seasonal uplift from 4Q digital media advertising demand, relative to its much larger peers like Facebook ( FB ) and Alphabet ( GOOGL ), which we think underscores the ongoing competitive challenges for audience and engagement growth across digital media platforms and properties,” wrote Rosenblatt analyst Martin Pyykkonen. “We would expect large private equity investors to seek a deep discount, perhaps even a take-under relative to Yahoo’s implied market value, with an intent to split the core business apart to try to generate value from the sum of the parts vs. the current whole value of the core business,” Pyykkonen said. Rosenblatt maintains a sell rating and price target of 30 on Yahoo stock. Yahoo stock rose 0.7% to 35.40 in afternoon trading in the stock market today ,  earlier touching a three-month high of 36.10. Excluding its 15% stake in China e-commerce giant Alibaba Group ( BABA ), Pyykkonen said, “Yahoo’s current market cap implies $3.3 billion valuation for the core business and the Yahoo Japan stake. We think the fundamental outlook for Yahoo as a ‘growth’ stock is continuing to erode, especially in light of strong secular trends which are benefiting the likes of Facebook and Google owner Alphabet, both of which have more revenue concentration from mobile advertising,” he said. Yahoo’s overall market value currently is near $33.5 billion. Is Yahoo The Next DoubleClick? “Financial engineering” alone won’t fix Yahoo’s growth ills, Pyykkonen said. He pointed to the once-public DoubleClick as an example of what might happen with Yahoo. “In 2005, DoubleClick was acquired by private equity firms Hellman, Friedman and JMI Equity for $1.1B and then sold to Alphabet (Google) just two years later, in 2007, for $3.1 billion. The nearly 3x private equity return was due to DoubleClick being a broken company and stock with poor management execution, but also having core technology and a revenue growth outlook,” said Pyykkonen. In a recent securities filing , Yahoo said it has written down the value of its Tumblr operation by 20% as the microblog’s revenue did not meet Yahoo’s internal projection for 2015, he said. A report in The Information said that Yahoo is considering a deal with Facebook to allow the giant social network to sell ads inside Tumblr’s mobile app, with Yahoo and Facebook splitting the revenue. Tumblr is among the few assets within Yahoo whose audience is growing, The Information said. Yahoo CEO Marissa Mayer is under intensified pressure from major investor Starboard Value, which has urged the exit of Mayer and some directors, as well as the spinoff of Yahoo’s core search business. Yahoo directors are close to offering at least two board seats to the activist hedge fund in order to avert a proxy fight, according to a recent New York Post report. Board member nominations are due by March 26, said Pyykkonen. Dozens of groups are expressing interest in buying the struggling Yahoo, say analysts, with Verizon ( VZ ) among those said to be the most likely acquirer. Facebook and Alphabet carry the highest-possible IBD Composite Rating of 99, while Alibaba has a CR of 82 and Yahoo’s CR is just 40.