Hortonworks (HDP): Looks Cheap Heading Into A Catalyst - Drexel Hamilton

Drexel Hamilton analyst, Brian White, noted that Hortonworks (NASDAQ: HDP) is co-hosting the Hadoop Summit in San Jose this week and the stock is trading at a discount to other rapidly growing software companies. Hortonworks is the fastest growing company the analyst covers (sales rose 134% in 2015 and we are projecting 57% growth in 2016E) and is trading at a depressed EV/revenue of just 2.5x CY:17 revenue estimates; down 52% YTD.

An analysis of high growth companies (seventeen companies) of the past and the EV/NTM sales ratios ranged from 9x at the trough to 22x at the peak in the first three years after going public. Hortonworks completed its IPO in December 2014 or eighteen months ago and the stock is trading at an enterprise-value-to-revenue ratio of just 2.5x CY:17 estimates or approximately 28% of the trough levels for this group of high growth companies. Moreover, Hortonworks is trading at just 44% of the EV/revenue of Splunk and 34% of Workday.

No change to Buy rating or price target of $30.

For an analyst ratings summary and ratings history on Hortonworks click here. For more ratings news on Hortonworks click here.

Shares of Hortonworks closed at $10.61 yesterday.

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