Shares of recent cloud software IPO Cloudera (CLDR) are trading higher by about 2% in pre-market action this morning following a set of mostly bullish analyst initiations. Today was the quiet period expiration date, allowing investment firms involved with the deal to publish research and establish estimates for the first time.
Before discussing this mornings' initiations in more detail, here is a little background on CLDR.
The company is a developer of a platform for data management, machine learning, and advanced analytics. Its software is used by enterprises to operate, manage, and move workloads across IT architectures, mixing on-premise and cloud environments. The company says it has pioneered the hybrid open source software development model, or, "HOSS."
This model is based on active participation in the open source data management ecosystem and software development process. To deliver the agility and innovation of open source software to its customers, its platform integrates 26 distinct open source projects, 18 of which were created by its engineers. CLDR believes their HOSS model delivers substantially greater value to customers in managing, operating and securing their data and data architectures.
In more detail, here are some of the key features and benefits of CLDR's platform:
- Deployable on-premise, in cloud, or both: CLDR's platform allows enterprises to manage both long-term and transient workloads across environments, including on premise and public cloud infrastructure (Microsoft Azure, Amazon Web Services, Google Cloud). It enables customers' multi-cloud strategies, allowing them to move workloads from the data center to the public cloud, and back again.
- Leverages latest open source innovation: As discussed above, CLDR's HOSS model centers on implementing open source innovations. This allows it to integrate some of the latest concepts in data management technology. As an example, in 2013, CLDR was the first data platform provider to incorporate Spark, enhancing batch processing and enabling real-time, streaming, and machine learning workloads.
- Enables machine learning: Through the aforementioned integration of Spark and data science languages like Python and R, its platform supports batch processing and real time advanced analytics. These capabilities allow enterprises to identify trends in historical data, to recognize events in current or streaming data and to predict events in the future, continuously improving with experience.
Rewinding back to the quiet period expiration, there were a couple of research notes that stood out from the pack. For example, Stifel was one of the most bullish on the name, assigning a Buy and $24 price target, about 14% higher from current prices. In its report, the firm commented that CLDR has plenty of runway left to grow and that future up/cross sell opportunities should sustain 30%+ recurring revenue growth and margin expansion in coming years.
Other bullish initiations included an Overweight at JP Morgan with a $24 target, an Outperform at Raymond James with a $23 target, and a Buy at Deutsche Bank. On the cautious side, Citigroup initiated it with a Neutral, but, the firm does have a $23 price target, still 10% above current prices.
Wrapping up, CLDR is off to a pretty solid start. Its April 28 IPO priced above expectations ($15 vs. $12-$14) and shares are now trading 40% higher than its IPO price. Today's mainly positive initiations may provide more fuel to maintain that momentum. It is also worth nothing that CLDR has its first quarterly report as a public company coming up on June 8, representing yet another potential catalyst for the stock.