Deutsche Bank: Elliott-Induced Upside At Qlik Already Baked In Stock Price

Shares of Qlik Technologies Inc QLIK have been on an uptrend since mid-February. Deutsche Bank’s Karl Keirstead downgraded the rating for the company from Buy to Hold, while maintaining the price target at $30.

Shares Surge

Qlik Technologies’ shares have gained 70 percent from their mid-February lows, and are up 20 percent since Elliott Associates disclosed a 9 percent stake in early March. Following the ramp-up, the company’s shares are trading at the same multiple as the shares of Tableau Software Inc DATA, despite lower revenue growth and comparable margins.

“We believe that much of the Elliott-induced upside is already in QLIK shares and our fundamental checks are muted,” analyst Karl Keirstead wrote.

Fundamental Checks

Checks through mid-March do not suggest any significant momentum in Qlik Technologies’ performance. In fact, most checks suggest better momentum of Tableau Software and PowerBI of Microsoft Corporation MSFT.

Qlik Technologies had guided to 1Q16 constant currency total revenue growth of 12-15 percent, which implies constant currency license growth of merely 5-10 percent, representing a decline from the 21 percent achieved in 2015. “While concerns about the health of the market are rising, in our view the Street views 1Q16 guidance as conservative and is expecting a beat,” Keirstead commented.