Canaccord Genuity Weekly Musing on Technology -- Enterprise Software
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Price: $33.75 +0.42%
Rating Summary:
11 Buy, 11 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
11 Buy, 11 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Canaccord Genuity Weekly Musing on Technology -- Enterprise Software by Richard Davis
Davis said, "Read throughs so far in earnings season. The comments from companies so far largely match up to our earnings preview from last week. Specifically, selling to healthcare and retail was generally easy. Many segments of government were weak. We were surprised that Informatica called out a pocket of weakness in the quarter from domestic financial services firms. They’re selling infrastructure software, so we suppose that could imply incremental headwinds for HOLD-rated Pegasystems (Nasdaq: PEGA). We don’t believe those comments bode poorly for our two other companies who have big financial services focus: Bottomline Technologies (Nasdaq: EPAY)(BUY) and NexJ (NYSE: NXJ)(BUY). Our reasoning is that both firms are entering what we expect to be multi-year product cycles."
For This Week:
Ultimate Software (Nasdaq: ULTI)(BUY-rated). Tuesday PM call. We are
forecasting $64 million and $0.14 non-GAAP, which is dead on with a tight
consensus.
PTC (Nasdaq: PMTC)(BUY-rated). Tuesday PM release/Wednesday AM call.
In-line to slightly ahead revenues and earnings seem likely. We’re at $281 million and $0.30. The company has the lowest valuation among the product design stocks at 15x and 13x 2011E and 2012E compared to a median of 18x and 16x, respectively.
SPS Commerce (Nasdaq: SPSC)(BUY-rated). Thursday PM call. Our checks in and around this firm’s eco-system indicate that momentum is spooling up. In the short-term, retailers are spending a bit more on technology.
Constant Contact (Nasdaq: CTCT)(BUY-rated). Thursday PM call. We don’t
have any big expectations for this quarter. After all, we’re entering a seasonally slow period for email additions, the small business economy is still in the tank, and the social media product isn’t out yet.
NetSuite (NYSE: N) (BUY-rated). Thursday PM call. This well-run company also selected Thursday night to release earnings, so DJ and I will have to toggle between CTCT and N. We expect revenues, FCF and calculated billings to be�$55.7 million, $5.6 million and $56.4 million. This implies year-over-year growth of 18%, 103%, and 17% respectively.
Monotype Imaging (Nasdaq: TYPE)(BUY-rated). Friday AM call. The valuation dial spools back on Friday morning with release of Monotype’s quarterly results. The firm beat estimates in its March quarter and should continue to benefit from modest accretion associated with the firm’s December acquisition of Ascender.
Davis said, "Read throughs so far in earnings season. The comments from companies so far largely match up to our earnings preview from last week. Specifically, selling to healthcare and retail was generally easy. Many segments of government were weak. We were surprised that Informatica called out a pocket of weakness in the quarter from domestic financial services firms. They’re selling infrastructure software, so we suppose that could imply incremental headwinds for HOLD-rated Pegasystems (Nasdaq: PEGA). We don’t believe those comments bode poorly for our two other companies who have big financial services focus: Bottomline Technologies (Nasdaq: EPAY)(BUY) and NexJ (NYSE: NXJ)(BUY). Our reasoning is that both firms are entering what we expect to be multi-year product cycles."
For This Week:
Ultimate Software (Nasdaq: ULTI)(BUY-rated). Tuesday PM call. We are
forecasting $64 million and $0.14 non-GAAP, which is dead on with a tight
consensus.
PTC (Nasdaq: PMTC)(BUY-rated). Tuesday PM release/Wednesday AM call.
In-line to slightly ahead revenues and earnings seem likely. We’re at $281 million and $0.30. The company has the lowest valuation among the product design stocks at 15x and 13x 2011E and 2012E compared to a median of 18x and 16x, respectively.
SPS Commerce (Nasdaq: SPSC)(BUY-rated). Thursday PM call. Our checks in and around this firm’s eco-system indicate that momentum is spooling up. In the short-term, retailers are spending a bit more on technology.
Constant Contact (Nasdaq: CTCT)(BUY-rated). Thursday PM call. We don’t
have any big expectations for this quarter. After all, we’re entering a seasonally slow period for email additions, the small business economy is still in the tank, and the social media product isn’t out yet.
NetSuite (NYSE: N) (BUY-rated). Thursday PM call. This well-run company also selected Thursday night to release earnings, so DJ and I will have to toggle between CTCT and N. We expect revenues, FCF and calculated billings to be�$55.7 million, $5.6 million and $56.4 million. This implies year-over-year growth of 18%, 103%, and 17% respectively.
Monotype Imaging (Nasdaq: TYPE)(BUY-rated). Friday AM call. The valuation dial spools back on Friday morning with release of Monotype’s quarterly results. The firm beat estimates in its March quarter and should continue to benefit from modest accretion associated with the firm’s December acquisition of Ascender.
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