Fitbit Inc. (N:FIT)
Information Technology - Electronic Equipment, Instruments | Reports November 2, after the close.
The Estimize consensus calls for EPS of $0.14, 40% higher than the Wall Street estimate. Revenues of $376.45M are also higher than the Street’s $358.66M, a difference of 5%.
What to Watch: Fitbit is certainly at the forefront of a booming industry, benefitting from a first mover advantage in wearable technology. According to digital marketing agency Acquity Group, only 7% of US consumers owned a wearable tech device in 2014, and that number is expected to reach 28% by 2016. Having just IPO’d in June, FIT blew away EPS expectations reporting $0.21, 7 cents above what the Estimize consensus was expecting. Revenues of $400.4M also surpassed estimates for $337.2M. The company closed out the quarter with sales of 4.5 million fitness trackers. Competitor Apple (O:AAPL) was hot on its heels with 3.6 million units sold. Many analysts believe that as the Apple Watch becomes available in more countries it will surpass FIT sales. To counteract this, FIT has greatly invested in its corporate wellness program, adding massive numbers to its customer base. Fitbit announced that it has signed more than 20 corporate clients to it’s wellness platform during the quarter, and now has around 50+ Fortune 500 companies in the program. One of it’s newest members is Target, where 335,000 employees now have fitness trackers. FIT stock is up 26% since it IPO’d 5 months ago.
Visa Inc. (N:V)
Information Technology - IT Services | Reports November 2, after the close.
The Estimize consensus calls for EPS of $0.66, four cents short of the Wall Street consensus. Revenues are also a little light at $3.591M vs. $3.558M.
What to watch: When the US consumer is healthy, credit card companies excel. There has been much debate about how strong the US consumer really is, benefitting from lower oil prices, but slightly offset by the lack of wage growth, which has caused consumers to be choosy in how they allocate their discretionary income. Nevertheless, consumer spending seems to be holding up. The JP Morgan Chase (N:JPM) Institute recently analyzed 25M of its debit and credit card holders to find they are spending about 80% of what they are saving on gasoline. Competitor Mastercard put up healthy numbers on Thursday morning, beating Estimize on bottom-line, but missing slightly on revenues. The company blamed the pesky dollar once again, saying EPS would have been up 11% on a currency adjusted basis. One of its latest deals gives Visa a one up on Mastercard (N:MA). On Monday it was announced that USAA, one of the biggest debit and credit card issuers, was moving its portfolio from Mastercard to Visa. USAA serves military members and their families, the switch was prompted by the plethora of benefits Visa offers such as no foreign transaction fees. The change will not go into effect until next year.
Cyberark Software Ltd. (O:CYBR)
Information Technology - Software | Reports November 5, after the close.
The Estimize consensus for CYBR stands at $0.17, 31% higher than the Wall Street consensus and growing. Revenues are expected to come in at $38.5M vs. the Street’s $36.98M.
What to watch: The threat of cyber attacks has boosted cybersecurity firms like CyberArk this year, but despite the growing need for these products the industry is full of haves and have-nots this earnings season. CyberArk specifically focuses on protecting organizations from cyber attacks, and is a pure play cybersecurity firm that does privilege account security inside the firewall to aid in protecting key assets. CYBR saw it’s stock perform very well during the first half of the year, but since late August it has tumbled more than 20%. Many felt the multiple was getting quite rich, and needed to come down. However, according to recent report by MarketsandMarkets, the cybersecurity market it expected to grow to $170B in the next 5 years, creating huge potential for CyberArk. One benefit CYBR has over its competitors is the intuitive nature of its platform which has garnered it many large clients. One metric to watch this quarter will be license revenues which grew 6% last quarter, and will be expected to top that in Q3. CyberArk is still very small and does not have a broad portfolio of products, causing many to believe it would be a good takeout target. It recently acquired Viewfinity, provider of “Windows least privilege management and application control software.” Using the Viewfinity technology helps enable organizations to halt the progression of most malware-based attacks at the initial point of entry.
Tableau Software (N:DATA)
Information Technology - Software | Reports November 5, after the close.
The Estimize community expects EPS of $0.09, 29% above the Wall Street consensus. Revenues are also higher at $161.84M as compared with the Street’s $156.96M.
What to watch: This is another stock that is all over the place this year, down more than 30% in Q3 after running up in Q2. DATA doesn’t perform well in volatile markets, and seems to be negatively correlated to the VIX. With a P/E ratio of 120, the valuation is really extended at this point, even for an industry that is expected to have high valuations. Despite that, fundamentals have remained strong, with revenues growing above 70% for the past 8 quarters, and revenue growth of 110%, 900% and 40% since FQ4 2014, after a drop of 25% in FQ3 2014. Last quarter the company did put up 3000+ new customers, but license revenue growth was the big concern, not beating as much as many investors had hoped. Increased competition from analytics rival Qlik Technologies (O:QLIK) have been heating up, although their suite of products is pricier than Tableau. Giants Amazon.com (O:AMZN), Microsoft (O:MSFT) and Salesforce.com (N:CRM) also pose a threat. Expectations are high for the recently launched Vizable Application, a product that helps users understand complex data via auto generated graphs and charts with just an iPad.
New Relic Inc. (N:NEWR)
Information Technology - Internet Software & Services | Reports November 5, before the open.
The Estimize consensus is expecting EPS of -$0.20, 10% better than the Street’s consensus, and 6 cents higher than company guidance. Revenues are just slightly higher at $42.03M vs. Wall Street’s $41.08.
What to watch: This little known stock just IPO’d at the end of the December, and while it may not be on retail investors’ radars yet, it’s done extremely well. The stock is up nearly 30% since its debut, and seems to hold up incredibly well in a volatile market. Fundamentals are strong, too. While not yet profitable, EPS has grown 65%+ in the past three quarters. Revenues have been even better, growing between 68% and 115% during the past 8 quarters, and are expected to be in that range again in FQ1 2016. New Relic is a provider of cloud services for tracking software performance and usage, which has grown in popularity as on-premise monitoring is no longer needed. Market research and advisory firm IDC actually named them as one of the top three in the cloud based systems management space, along with bigger players such as Systems Now and IBM (N:IBM).