Cloudera Analysts Say Private, Public Cloud Traction Key After Mixed Q1

Cloud-based enterprise data company Cloudera Inc CLDR reported better-than-expected first-quarter results but issued below-par guidance Wednesday, sending its shares lower.

The Cloudera Analysts

BofA Securities analyst Kash Rangan reiterated an Underperform rating on Cloudera shares with an $8 price target.

Wedbush analyst Daniel Ives maintained a Neutral rating and hiked the price target from $12 to $14.

Needham analyst Jack Andrews reiterated a Hold rating.

Stifel analyst Brad Reback maintained a Hold rating and $11 price target.

Morgan Stanley analyst Sanjit Singh maintained an Overweight rating and nudged up the price target from $14 to $15.

Cloudera's Long-Term Guidance Could Be Challenging, BofA Says

Cloudera's first-quarter results reflected a large deal size momentum, lower churn, higher renewal rates and adoption of new products, Rangan said in a Thursday note.

The company may find it challenging to achieve its longer-term guidance of 15-20%-plus revenue growth and 20%-plus cash flow margins due to several moving pieces, the analyst said. 

Among the challenges Rangan highlighted were sustained intense competition from public cloud vendors, uncertainty over the success of its recently released first-generation CDP Public Cloud and the likelihood of the yet-to-be released CDP Private Cloud succeeding. 

BofA attributed the lowered price target to lower revenue growth.

See also: Investors Sell The News Of IBM-Cloudera Rumor

Wedbush Incrementally Confident In Cloudera Story

Cloudera's much better-than-expected April results are another much-needed positive step in the right direction, especially after a challenging post-Hortonworks acquisition period, Ives said.

"The company beat the Street across the board in a dark COVID-19 macro as the product vision and execution are playing out and showing residency in a tough backdrop," the analyst said. 

Any negative stock move in the wake of the results is a "knee-jerk reaction" related to lofty expectations into the print and softer guidance, he said. 

Cloudera is starting to turn the corner and capitalize on its scale and scope in the complex market arena of Hadoop while hand holding customers and partners accordingly on the new product roadmap, Ives said.

Wedbush said its revised price target reflects incremental confidence in the Cloudera story.

Traction With Private, Private Cloud Releases Paramount To Investor Confidence, Needham Says

The first-quarter results were driven by renewals from Cloudera's existing customer base that primarily comprised large enterprises, as reflected by the record addition of "more-than-$1 million customers," Andrews said.

With the materiality of the CDP Public and Private Cloud still unfolding, the management factored in minimal contributions to fiscal year 2021 results, the analyst said. 

"We believe traction with these releases is paramount in order for investors to gain confidence that the company can truly participate in the high-growth end markets involving data analytics."

Multiple Expansion Unlikely Until Visibility Improves On Revenue, Customer Growth, Stifel Says

New customer activity was lackluster, as clients with over $100k of ARR fell 1% sequentially, Reback said.

The fiscal year 2021 guidance fell short of expectations given the impact of the COVID-19 pandemic on new business activity and its professional services business, the analyst said. 

"We believe that the success of CDP Public Cloud is a key to Cloudera being able to gain market share in the rapidly evolving, and ever competitive, market for data analysis tools." 

Until there is clear line of sight on sustained revenue and customer growth, the analyst said he sees little multiple expansion for Cloudera. 

Morgan Stanley Sees Progress On Cloudera's Profitable Growth Vision

The first quarter extends Cloudera's streak of better execution with a beat across all key metrics, and the fiscal-year 2021 subscriber revenue guidance was ahead of consensus, Singh said.

"With expanding margins and a new product cycle showing some encouraging signs, we see progress on the profitable growth vision which looks undervalued," the analyst said. 

CLDR Price Action

At last check, Cloudera shares were down 11.81% at $10.94.

Related Link: Cloudera Delivers Beat And Raise, But Growth Remains Lower Than Industry Rates