Software And Cloud Technology: An Earnings Preview

BTIG analysts expect modest upside from earnings reports of Seagate Technology PLC STX and Western Digital Corp WDC this week and see an upbeat print from CommVault Systems, Inc. CVLT.

Seagate And Western Digital

Seagate and Western Digital report quarterly earnings after the close on January 24 and January 25, respectively. BTIG believes supply remains constrained relative to demand against a broader backdrop of positive structural change across both HDDs and memory.

“On the HDD front, we think we’re likely to see modest upside to revenues for both WDC and STX due to ongoing strength in cloud build-outs and moderating decline in PCs, partially offset by slightly lower enterprise storage demand, where our quarterly checks have been soft,” analysts including Joel Fishbein wrote in a note.

On the NAND front, the analyst noted that results from semiconductor peers and incremental updates out of the supply chain suggest that supply remains tight relative to demand, which is good for memory pricing, revenues and gross margins.

BTIG has Buy ratings on both Seagate and Western Digital, with price target of $50 and $85, respectively.

CommVault

CommVault reports Wednesday. The analysts expect revenues to exceed their estimates of 6 percent growth and billings to beat forecast of 9 percent growth.

“Our checks on the quarter were positive and we believe Commvault (CVLT, Buy, $61 PT) should continue to execute well and positive momentum should persist,” Fishbein continued.

And Others

ServiceNow Inc NOW is scheduled to announce its fourth-quarter numbers Wednesday after the close. BTIG projects the company’s results to come in line with our revenue and billings growth estimates of 33 percent and 30 percent, respectively, driven by the company’s sales and marketing investments. BTIG has a Buy rating on the stock.

Citrix Systems, Inc. CTXS too reports its fourth-quarter results Wednesday after the close. The analysts, who have a Neutral rating on the shares, estimate that revenues should decline 1 percent, while billings expected to grow 3 percent.

BTIG, which has a Neutral rating on the shares, believes Citrix will face tougher competition in the coming days, despite being well positioned at the nexus of multiple secular trends in the software industry.

Further, Proofpoint Inc PFPT reports Thursday. The analysts project results to be in line to slightly ahead of their revenue (39 percent) and billings (38 percent) growth estimates.

Meanwhile, the company's recent Federal Risk and Authorization Management Program (FedRAMP) certification would help Proofpoint gain more presence in the government space. BTIG maintains its Buy rating on the stock.