What The Brexit Means For Software Stocks

In view of Friday’s European Referendum vote on Brexit, or Britain’s exit from the European Union, Brean Capital’s Yun Kim said in a report that currency rates could exhibit “greater volatility” in the near term, impacting the overall results for software companies that have meaningful exposure outside the US.

Analyst Yun Kim noted that revenue mix estimates for software companies under coverage:

salesforce.com, inc. CRM – UK Exposure: 5 percent, European Exposure: 17 percent
Tableau Software Inc DATA – UK Exposure: 14 percent, European Exposure: 28 percent
Intuit Inc. INTU – UK Exposure: <5 percent, European Exposure: <5 percent
Manhattan Associates, Inc. MANH – UK Exposure: 6-7 percent, European Exposure: 12-13 percent
MicroStrategy Incorporated MSTR – UK Exposure: 15 percent, European Exposure: 30 percent
Qlik Technologies Inc QLIK – UK Exposure: 10 percent, European Exposure: 49 percent
Varonis Systems Inc VRNS – UK Exposure: 18 percent, European Exposure: 35 percent
Workday Inc WDAY – UK Exposure: 8 percent, European Exposure: 16-17 percent

“We note that INTU has the least amount of exposure outside of the U.S. (less than 5% of revenue), with MANH and CRM having less than 10% exposure in the U.K. based on our estimates,” Kim wrote.