Cloudera (CLDR): Tempting? Sure, But It Might Not Be a Buy Just Yet


Shares of storage software maker Cloudera (NYSE:CLDR) fell nearly 40% last week to all-time lows after the company issued guidance that came in sharply lower than Wall Street was hoping. Yet, while the stock looks “tempting” at current levels, investors are still unsure about the level of risk the company faces.

To gain investors’ confidence, Cloudera hosted an Investor & Financial Analyst Day in NYC yesterday, and analyst Brian White of Monness, Crespi, Hardt came back encouraged, though he still rates the stock a “Neutral”.

White wrote, “We believe Cloudera did a solid job of walking the financial community through the current issues and the solution. Moreover, we felt the meeting proved very helpful in addressing investor concerns and reminding the financial community of the company’s long-term potential with its Big Data platform that supports machine learning, analytics and the cloud. Trading at an enterprise-value-to-revenue ratio of just 5.2x our CY18 sales forecast and 4.4x our CY19 estimate, Cloudera is inexpensive for a next-gen software player but also a “show me stock” for now.”

“Cloudera highlighted three strategic growth drivers that included plans to lead machine learning in the enterprise, disrupt the data warehouse market and capitalize on cloud adoption. Despite the near-term turbulence in the company’s business, Cloudera maintained its long-term financial model,” the analyst added.

White is one of the top analysts on Wall Street covering technology. His picks average a 15.8% one-year return, and he’s ranked in the top 10 percent of all analysts, according to TipRanks.com.

If we turn to the Street in general, we can see that Cloudera certainly has the Street divided, as TipRanks analytics indicate. Based on 8 analysts polled in the last 3 months, 4 are bullish on Cloudera stock, while 4 remain sidelined. The 12-month average price target stands at $18.86, marking a nearly 36% upside from where the stock is currently trading.