Rosenblatt Starts Talend SA (TLND) at Buy
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Rosenblatt initiates coverage on Talend SA (NASDAQ: TLND) with a Buy rating and a price target of $30.00.
Analyst Marshall Senk commented, "We view Talend as a potential disruptive force in the market for data and application integration. These markets are dominated today by custom developments alongside legacy technologies from vendors such as Informatica, IBM (IBM:NR), Tibco and SAP (SAP:NR) – none of which are architected for the modern hybrid cloud environment. Talend has adopted a hybrid open source business model, making the platform available for free to developers and selling subscriptions for incremental enterprise functionality. We believe that both the shift to cloud and the emergence of big data analytics are driving the need for a packaged integration solution as the number of potential targets and sources grows exponentially."
He added, "Talend priced its IPO on July 28th of this year at $18 per share. The stock ran up toward $35 quickly and following the formal release of Q2 earnings (which were in line with the preliminary numbers disclosed during the IPO roadshow) has retreated back to current levels. We believe that TLND is well positioned to sustain topline growth in the 30% range, with operating margin improvement and positive FCF this year and next. For Q3, we estimate revenue of $26.5 million, EPS of ($0.24) and FCF of $1.1 million. We model 300bp of sequential operating margin improvement. For 2016 we model revenue of $104 million (up 37%), EPS of ($0.92) and FCF of $1.07 million. For 2017 we model revenue of $134 million, EPS of ($0.52) and FCF of $3.1 million, with operating margins improving from -23% to -12%."
Shares of Talend SA closed at $25.04 yesterday.
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