Tag Archives: technology

Ultimate Software Gains Momentum, Beats Street, Raises Forecast

Shares of enterprise software maker  Ultimate Software Group ( ULTI ) jumped 6% in morning trade before settling back, following Tuesday’s impressive first-quarter report, which beat Wall Street’s top and bottom lines. Ultimate, which specializes in HCM SaaS — human capital management software as a service — reported first-quarter EPS up 40% to 73 cents minus items, eight cents beyond consensus, on sales up 29% to $187 million, where Wall Street expected $180 million. With 2016 gaining momentum, Ultimate also raised its full-year forecast to 26% sales growth from 25% “and now claims 99% visibility into this goal,” noted Evercore ISI analyst Kirk Materne. Materne raised his price target to 200 from 195 “based on the continued acceleration in the business, especially in the midmarket,” he said in a Wednesday research note, reiterating a hold rating. “All in all, we believe the company remains on track to hit its $1 billion revenue target in 2018; and with the company’s current (2016) guidance implying (an approximately) 275 basis-point decline in recurring revenue growth in (the second half vs. the first half), we expect that estimates could potentially have room to move higher over the course of the year.” More bullishly, FBR analyst Samad Samana said in a Wednesday research note, Ultimate ultimately “can deliver accelerating revenue growth and margin expansion in 2016.” Samana raised FBR’s price target on Ultimate to 220 from 205 while maintaining an outperform rating. Climbing the right side of a 25-week cup base, Ultimate stock jumped 6% to 209.71 in morning trade before settling back to a 0.5% gain near 198 in the stock market today , 8% off a 216.27 record high set Nov. 9. Ultimate’s enterprise rivals and peers were mixed Wednesday, with Salesforce.com ( CRM ) down 1.5% to 75.05, while SAP ( SAP ) was up 1.2% to 80.43, less than 1% from recent highs. Legacy software developer Oracle ( ORCL ) was down fractionally. Microsoft ( MSFT ) was off 1%. One stock in IBD’s Computer Software-Enterprise industry group, that of cloud advertising software developer Rubicon Project ( RUBI ), enjoys a slightly better IBD Composite Rating than Ultimate: Rubicon’s best-possible 99 vs. Ultimate’s 98. Salesforce carries a 93 CR and SAP 72. Outside the group, Oracle is rated 60 and Microsoft 43. Ultimate’s 40% EPS growth rate was the best in eight quarters, but its 29% sales pace was the best in at least 19 periods. For the second quarter, Ultimate guided its adjusted operating margin to 20% and total sales to $187 million. Analysts polled by Thomson Reuters are expecting earnings of 77 cents per share minus items on revenue of $185 million. A year ago in Q2, Ultimate earned an adjusted 62 cents per share on sales of $147 million. Needham analyst Scott Berg said he was “impressed” that Ultimate reported consecutive quarterly deferred revenue growth exceeding 30% in the first quarter and year-to-year deferred revenue up 34.5%, its best in at least six years. He reiterated a buy rating with a 220 price target.

Cirrus Logic Beats, But Apple iPhone Slump Dings Skyworks, Qorvo

Cirrus Logic ( CRUS ) stock dodged Apple ’s ( AAPL ) tornado Wednesday, while shares of Apple suppliers Broadcom ( AVGO ), Qorvo ( QRVO ) and Skyworks Solutions ( SWKS ) fell on Apple’s first ever year-over-year decline in iPhone sales. In midday trading on the stock market today , Cirrus Logic stock bounded 6.5%, near 36, after the chipmaker late Tuesday posted fiscal Q4 metrics that declined vs. the year-earlier quarter but still topped Wall Street expectations. The results were similar to fellow Apple supplier NXP Semiconductors ( NXPI ), which late Monday reported consensus-topping Q1 earnings that also fell year over year. Cirrus Logic’s current-quarter guidance lagged analyst consensus on softening iPhone sales . Late Tuesday, Apple said that it had shipped 51.19 million iPhones in the March quarter, down 16% from the year-earlier quarter. Needham analyst Rajvindra Gill cut estimates on Apple suppliers Skyworks and Qorvo ahead of their earnings reports, slated for after the market close Wednesday. Apple’s June-quarter revenue guide for $41 million to $43 million implies 38 million iPhone shipments, Gill wrote in a research report. Analyst consensus currently estimates 44 million iPhone shipments for the June quarter, he wrote. “While we expect iPhone unit shipments to grow seasonally beyond the June quarter, we believe overall shipment levels are likely to be below our prior estimates,” he wrote. He cut his price targets on Skyworks and Qorvo stocks to 70 and 50 from 77 and 54, respectively, but kept his buy ratings. But Gil retained his buy rating and 50 price target on Cirrus Logic stock. Massive Opportunity Outside Apple Cirrus Logic reported $232 million in sales for the quarter that ended March 26 and 38 cents earnings per share ex items, down a respective 9% and 42% vs. the year-earlier quarter. The consensus of nine analysts polled by Thomson Reuters called for $226.2 million and 21 cents. Cirrus Logic wrapped up fiscal 2016 with $1.2 billion in sales and $2.40 EPS minus items, topping Wall Street for $1.16 billion and $2.22. Sales climbed 31% but EPS fell 10%. On a year-over-year basis, portable audio product sales — which would include mobile — fell 11% in fiscal Q4 but rose 34% in fiscal 2016. For the current quarter, Cirrus Logic expects $220 million to $250 million in sales, which at the midpoint would be down 17% and missing expectations for $258 million. But Cirrus Logic is gaining content at Apple, “thus insulating it from potential unit shipment declines,” Gill wrote. Outside Apple, he estimates that Cirrus Logic’s total addressable digital solutions market could reach $420 million over the next four years, up from just $21 million. Besides Skyworks and Qorvo, fellow Apple supplier Texas Instruments ( TXN ) is also slated to post financials late Wednesday. Shares for the three companies were down a respective 1.5%, 2% and fraction midday Wednesday. For fiscal Q2, the consensus of 25 analysts expects Skyworks to report $775.6 million in sales and $1.24 EPS minus items, up a respective 2% and 8% year over year. Wall Street calls for Qorvo to report $600 million in sales and 92 cents EPS minus items for its fiscal Q4, and $2.6 billion and $4.26 for its fiscal 2016. Across the board, every metric would fall vs. the year-earlier period. Texas Instruments is expected to wrap Q1 with $2.98 billion in sales and 62 cents EPS, down 5% and up 2%, respectively.

Boston Scientific Stock Hits 10-Year High After Q1 Beats Estimates

Medical device maker Boston Scientific ( BSX ) popped to a 10-year high Wednesday after it reported a strong Q1 and raised its guidance. Boston Scientific’s adjusted earnings totaled 28 cents in the quarter, up 33% from the year-earlier quarter and beating analysts’ consensus by four cents, according to Thomson Reuters. Revenue rose 11% to $1.96 billion, beating consensus by about $50 million. Boston Scientific added more than $100 million to its full-year revenue guidance range, now $8.08 billion to $8.23 billion, up 9% at the midpoint vs. $7.48 billion last year. It also added two cents to its full-year EPS guidance, now 64 to 69 cents. The company said that its sales in the current quarter should be $2.01 billion to $2.06 billion, up 10.6% at the midpoint from $1.84 billion a year ago and on the high side of consensus. Its earnings guidance of 25 to 27 cents a share was in line with Wall Street’s estimate and up from 21 cents last year. Boston Scientific stock was up 9.5% in morning trading on the stock market today , near 21.50 and hitting its highest point since May 2006. In a research note Wednesday, RBC Capital Markets analyst Glenn Novarro broke down the results. “Cardiovascular revenues of $790 million (+13% year-over-year constant currency) easily topped our estimates and consensus,” he wrote. “We believe cardiovascular results were led by share gains for Synergy (drug-eluting stent) in the U.S., robust adoption of Watchman (left atrial appendage closure device) and strong peripherals sales. “Meanwhile, MedSurg sales of $682 million (+28% year-over-year constant currency, +11% year-over-year organic) also topped expectations, driven by strong Endoscopy results, owing to Spyglass DS (direct visualization system) and the launch of the Axios stent system, and Urology/Women’s Health.” On the downside, Novarro said that cardiac rhythm management sales were light, which he says is due to Medtronic ( MDT ) taking share in the implantable cardioverter defibrillator market. However, Evercore ISI analyst Vijay Kumar wrote that Monday’s approval of a new MRI-safe suite of pacing products should help boost the division. Boston Scientific’s growth has been picking up the last three quarters, helping drive the stock to a strong IBD Composite Rating of 94.