Qlik – A Worthwhile Investment Prospect?

Summary

 

  • Qlik Technologies Inc. has seen impressive growth in its revenues since it jumped on to the tech space in the US economy.
  • The company has seen its revenues grow over the years but earnings have declined especially over the course of the last couple of years.
  • VWR has recently deployed QlikView as its platform of choice for complex and thorough analysis on more than 8 terabytes of data.
  • The company’s revenues and earnings for Q4 2014 showed year on year growth and managed to outperform analysts’ projections for the quarter.
  • Since its IPO, Qlik Technologies Inc. has been a worthwhile investment prospect for investors in it for the long haul as well as small-cap investors.

User-driven business intelligence software provider originally founded in Sweden Qlik Technologies Inc. has seen impressive growth in its revenues since it jumped on to the tech space in the US economy. The company’s growth has been led by its software solutions along with its analytical platform called the QlikView Business Discovery platform which allows for data sharing and on the go data analysis for consumers as well as businesses. The company has seen impressive consumer growth over the course of the last 5 years since its IPO on Wall Street. The company’s business model has been based on innovation and has come to fruition in modern time of interconnectedness. The increased demand for high speed internet services, high quality software based enterprise management and on the go data analysis has highly benefited QlikTech as their business model has been facilitated by the growth of modern technology. The company has seen its revenues grow over the years but earnings have declined especially over the course of the last couple of years. QlikTech has seen its consumer base and hence revenue grow, the company has also beefed up R&D spending as well as marketing expenditures in a bid to boost business and add further momentum to customer base growth. The company has managed to succeed at growth but has to work further on improving monetization in order to boost bottom lines. The company’s share prices have seen growth since its IPO as investors are viewing QlikTech as a growth opportunity.

POTENTIAL UPSIDES FOR QLIK TECHNOLOGIES INC.

Deal with VWR

Leading independent provider of laboratory facilitation equipment and software based solutions VWR has recently deployed QlikView as its platform of choice for complex and thorough analysis on more than 8 terabytes of data. The deal represents a long term boost to the company’s revenues and the synergies from the deal will also allow for more effective utilization of QlikView and thus enhance monetization for one of the company’s key revenue and value generating segments. The effective utilization of QlikView will allow for the recovery of the R&D costs that went into upgrading the capabilities of the platform. As a tech firm in the modern era, there is pressure on Qlik Technologies to continue innovating in order to capture greater market share in the tech space and improve its customer base. The company’s portfolio consists primarily of its software solutions and the QlikView platform which are its key value driving elements.

Growth of cloud platforms

Considering Qlik Technologies’ business model, cloud adoption would allow for massive growth for its software segment as well as the QlikView platform and would allow the company to tap into the massive growth prospects which lie in store for the global cloud market. The global cloud market is expected to continue to grow at a CAGR almost 20% over the course of the next 5 years. Cloud adoption would allow for more effective utilization and the resulting consumer base growth would add further momentum to the company’s customer base. Cloud technologies are increasingly becoming the tools of choice for the businesses of today in terms of handling their data as well as handling enterprise resource management. The opportunities for Qlik to step up are thus immense and market trends are definitely in favor of the company’s business model especially in the modern era of technological revolution. Interactivity is on the rise and QlikTech’s platforms allow for interactive data analysis, discussion and sharing on the go. The demand side trends are thus also in QlikTech’s favor.

Bottom lines showing signs of improvement

The company’s efforts towards monetization are coming to fruition as the company’s earnings have shown marked improvement when Qlik Technologies Inc. reported its financial results for the final quarter of FY 2014. The company’s revenues and earnings showed year on year growth and managed to outperform analysts’ projections for the quarter. Qlik Technologies Inc. reported earnings of $0.32 per share during their final quarter of FY 2014 on revenues of $183 million. The company witnessed year on year growth in top lines as well as bottom lines during the quarter and has remained upbeat in its projections for FY 2015. The company’s intensive R&D spending as well as marketing expenditures are bearing fruit as monetization has improved and bottom lines are once again showing signs of growth after struggling for the past couple of years. There are definite upsides in store for the company’s stock as analysts have also remained upbeat in their outlook for the company.

Conclusion

Since its IPO, Qlik Technologies Inc. has been a worthwhile investment prospect for investors in it for the long haul as well as small-cap investors. The company has been an impressive performer on the stock market with share prices growing steadily over the years. The company does have massive growth prospects in store with market trend in favor of the value generating aspects of the company’s business and organic growth also in store. Investors would find it highly worthwhile to buy into the company’s stock.

Source: seekingalpha.com