The Cloudera Company is offering Data Science for programmatic preparation, predictive modeling, and machine learning. This is one of the real-time for online, streaming and realtime applications, and Cloudera Analytics for business intelligence and structured query language (SQL) analytics. It is generated the hybrid open-source software (HOSS) development model. This is helping customers in managing, operating and securing their data and data architectures.Cloudera (NYSE: CLDR at https://www.webull.com/quote/nyse-cldr) is reporting fiscal 2021 guidance that is unimpressive.
Unsurprising Fiscal 2021 Guidance
- Cloudera’s fiscal 2021CLDR stock or CLDR stock news (calendar 2020) is pointing towards revenue growth rates of 10%.
- Investors that had been hoping to see strong revenue growth were likely to find themselves surprised by this year-over-year drop in revenues growth grates going into fiscal 2021.
- Furthermore, complicating the overall bullish thesis is that Cloudera’s fiscal 2019 finished with 160 million shares outstanding, and they are now looking out into fiscal 2021 to see the total weighted-average number of shares outstanding finishing at close to 322 million.
- Note, this is a weighted average, meaning that Q4 2021 is likely to see the total number of shares approximate 330 million, or slightly more than 100%increase in the total number of diluted shares compared with fiscal 2019.
Valuation – No Margin of Safety
- One positive aspect that is worthwhile considering is that Cloudera balance sheet is debt-free, with $380 million of cash and equivalents.
- Hence, given the potential stability of its operations, it has set about to repurchase $100 million of its shares via an open-ended program.
- Having said that does not foresee a scenario of how repurchasing overvalued stock in a company that is likely to grow at just 10% for the foreseeable future is compelling.
- At the end of the day, this management team is wanted to manage and keep their jobs. To hold onto precious capital right now will be viewed as being prudently managed.
- Again, at the top end of its guided range of $90 million of non-GAAP operating income for fiscal 2021, this stock already trades more than 24 times forward operating income. This top line is only expected to grow at low double digits, a significant mismatch between expectations and reality.
The Bottom Line
Investorstook positively its fiscal 2020 guidance. Nevertheless, this investment is overvalued and that investors should be looking to enter this stock once cheaper prices prevail.
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