JMP Securities analysts are weighing in on drug maker Endo International plc – Ordinary Shares (NASDAQ:ENDP) and data visualization software maker Tableau Software Inc (NYSE:DATA), as shares of both companies fell sharply today due to disappointing earnings. Let’s take a closer look.
Endo International plc
Shares of Endo are collapsing, down 40% as of this writing, after the company reduced its revenue guidance for the year from $4.32-4.52B to $3.87-4.03B and EPS from $5.85- $6.20 to $4.50-$4.80. The guidance reduction was driven by delays in FDA regulatory actions with two 505(b)2 filings from 2H16 to FY17, an early Voltaren generic approval, and pricing pressures in commodity generics.
In reaction, JMP analyst Donald Ellis lowered his price target to $52 (from $56), while reiterating an Outperform rating on the stock.
Ellis commented, “Endo reduced 2016 guidance based on several factors. Endo’s Qualitest legacy base business experienced additional competitive, lost business due to new PBM consortiums and experienced pricing pressures. Endo’s Voltaren Gel faced earlier-than-expected generic competition by Amneal. Finally, Endo’s 505(b)2 products have experienced delays in FDA regulatory actions and now Endo expects the products to come to market in 2017. Overall, we believe management is being more conservative than necessary and Endo will start exceeding Consensus for the remaining quarters in 2016. We are adjusting our 2016-2018 estimates based on the new guidance and information.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Donald Ellis has a yearly average return of 0.5% and a 33% success rate. Ellis is ranked #2328 out of 3899 analysts.
Out of the 16 analysts polled by TipRanks, 9 rate Endo stock a Hold, while 7 rate the stock a Buy. With a return potential of 226%, the stock’s consensus target price stands at $53.
Tableau Software Inc
Yesterday, Tableau Software announced first-quarter results that handily topped Wall Street estimates, with non-GAAP EPS of breakeven versus consensus of ($0.10), and revenue of $172 million, versus consensus of $164 million. However, the stock is down over 10% following negative comments issued by analysts at Mitsubishi UFJ.
JMP’s Greg McDowell noted that he would use the pullback in the share price as an opportunity to own a company that is cash flow positive, taking market share, and trading for only 2.8x EV/2017E revenue, a significant discount to its high-growth peer group.
McDowell wrote, “The revenue upside was due in part to better-than-expected license revenue driven by more new customers than we were expecting (3,500 versus our estimate of 3,200) and 268 deals over $100k (versus our estimate of 250). Tableau guided above consensus for revenue, and perhaps more importantly almost doubled its operating income and EPS expectation for the year.”
“We raise our 2016 non-GAAP EPS estimate to $0.53 from $0.27, versus consensus of $0.34, and raise our 2017 non-GAAP EPS estimate to $0.72 from $0.45, versus consensus of $0.67. Our $75 price target is based on 5x EV/2017E revenue, roughly in line with the median of the high-growth software group,” the analyst continued.
According to TipRanks.com, analyst Greg McDowell has a yearly average return of -4.2% and a 35.3% success rate. McDowell has a -17.4% average return when recommending DATA, and is ranked #3110 out of 3899 analysts.
Out of the 28 analysts polled by TipRanks, 15 rate Tableau Software stock a Buy, 11 rate the stock a Hold and 2 recommend Sell. With a return potential of 75.4%, the stock’s consensus target price stands at $77.88.