Shares of Cloudera Inc. (NYSE: CLDR) surged in pre-market trading on Thursday after the enterprise cloud services provider topped revenue forecasts for the most recent quarter. The gains were underpinned by separate news that Cloudera had acquired Arcadia Data, a move that will help bolster the company’s cloud business intelligence service.

 

Q2 Earnings Summary

  • Earnings: -$0.02 per share
  • Revenue: $196.7 million
Cloudera acquired Arcadia Data, an advanced data analytics platform founded in 2012, giving Cloudera exposure to IOT, which is considered a paradigm shift for the technology industry.

For its fiscal second quarter, Cloudera posted an adjusted loss of $0.02 per share on revenue of $196.7 million. Both the top- and bottom-line results topped analysts’ forecasts. As Zacks reports, Cloudera has surpassed earnings estimates in three of the last four quarters.

Cloudera’s revenue numbers were truly impressive. Sales rocketed 78.2% compared with a year ago, underscoring the massive potential of enterprise data solutions in today’s economy.

For the present quarter, Cloudera expects revenues of between $187 million and $190 million. For fiscal 2020, the company expects to generate between $765 million and $775 million. Losses per share are forecast to be between $0.24 and $0.28. These ranges are healthier than what Wall Street is expecting.

In separate news, Cloudera announced that it had acquired Arcadia Data, an advanced data analytics platform founded in 2012. The acquisition gives Cloudera exposure to IOT, which is considered a paradigm shift for the technology industry.

Marty Cole, chairman of the board and interim CEO of Cloudera, issued the following statement:

We executed better in Q2, exceeding expectations on all our financial measures. Most importantly, we delivered an initial release of our cloud-native data management and analytics offering, Cloudera Data Platform. We are focused on meeting our customers’ demands for hybrid and multi-cloud solutions that support use cases from the Edge to AI. That is the promise of CDP and the enterprise data cloud.
Cloudera Share Price YTD - Sep 5 2019

Source: Yahoo Finance

CLDR Surges

Cloudera’s stock price surged nearly 12% in pre-market trading, eclipsing $8 for the first time since early June.

Looking at Cloudera’s yearly performance, the latest upsurge is clearly a relief rally. The stock is down 28% for 2019, vastly underperforming the S&P 500’s information technology index.

At current values, Cloudera has a market capitalization of nearly $2 billion.

Cloudera first went public in March 2017 after being ranked number five on the Forbes Cloud 100 list. As a publicly-listed company, CLDR has been extremely volatile. The stock peaked north of $22 after going public but has since given back more than 60%.

 

Conclusion

Cloudera is a fast-growing cloud service provider, but a lack of profitability has distorted its value proposition. If the company lives up to its potential, it could be a bargain at just $8 a share.

Disclaimer: Author holds no investment position in Cloudera at the time of writing.