Cloud software company Cloudera spikes after results, peers folllow

Shares of Cloudera (CLDR), a cloud software company that provides a platform for machine learning and analytics, surged on Thursday after reporting results for its third quarter that blew past analyst estimates. QUARTERLY RESULTS AND GUIDANCE BEAT ESTIMATES: Cloudera reported a loss per share for Q3 of (3c) on revenue of $118.2M. Analysts were modeling an (11c) loss on revenue of $113.88M. "We are pleased with our execution in Q3 and our progress on the strategic combination we have announced with Hortonworks (HDP). Pre-closing merger integration planning is going well. And more importantly, we are very encouraged by the reception that our plans are receiving from customers, partners, and the developer community," said Cloudera Chief Executive Officer Tom Reilly. He added that "Together, we will enhance our competitiveness, accelerate our momentum in cloud innovation, and provide a comprehensive solution-set for customers, from the Edge to AI." Cloudera's guidance for Q4 was also better than analyst projections, forecasting EPS of (12c)-(10c) on revenue of $119M-$122M. The company sees FY19 EPS of (40c)-(38c) on revenue of $450M-$453M. COMBINATION WITH HORTONWORKS: In November, Needham analyst Jack Andrews upgraded Cloudera to Strong Buy from Buy and raised his price target to $31 from $23, citing his deeper review of its combination with Hortonworks, saying it will bring "accelerating operating leverage" and "strategic value" given their respective areas of strength in separate use cases of Internet of Things and AI/Machine Learning. Andrews also notes that some customers prefer to have a single vendor, adding that his review of the synergies suggests a "large valuation gap" for the company relative to its peers. PRICE ACTION: Shares of Cloudera are up 12% to $12.98 in afternoon trading. CLOUD PEERS TRADE HIGHER: On a day when major U.S. indices trade dramatically lower, shares of Workday (WDAY), SendGrid (SEND), Twilio (TWLO), Box (BOX), Instructure (INST), MobileIron (MOBL), Splunk (SPLK), Tableau (DATA) ServiceNow (NOW), Hortonworks are all higher.

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