Imperial Maintaining Outperform Rating on Mobileiron but Reduces Price Target to $4.50

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Imperial Capital's Michael Kim maintains Outperform Rating on
Mobileiron Inc.MOBL
and lowers the price target from $5.50 to $4.50. Kim maintained that the price target "implies potential upside of about 44% above recent levels." But he reduced his FY16 and FY17 estimates due to "lower than expected billings performance in Q1'16." Kim expects further deceleration in Q2'16 "due to sales execution challenges." The company itself has slashed its guidance for FY16 billings and revenue due to "reduced visibility and timing of large transactions in the pipeline" Kim noted. Mobilelron appointed Barry Mainz as CEO in early January and investors are waiting to see the fruits of the "turnaround strategy" that Mainz has been implementing since the start of the year Kim said. Q1'16 results showed an adjusted revenue of $38 million and adjusted net loss per share of $0.13 compared to estimates of $39 million and net loss per share estimates of $0.13. With an overall mixed Q1'16 results and expectation of flat billings Q2'16 visibility continues to decrease on Mobilelron. Kim stated that Guidance was Updated:
  • "At the midpoint guidance implies adjusted operating loss of approximately $13 million and negative adjusted operating margin of about 35%"
  • "Management withdrew guidance about growth estimates relatively 15% and 15% in adjusted revenue and gross billings respectively."
  • "A negative adjusted operating margin of 8-12%."
  • A single positive remains with "management reaffirmed guidance of achieving a breakeven cash flow and from operations in Q4'16."
Shares of Mobilelron were down .64% to $3.10 on Wednesday at the close.
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Posted In: Analyst ColorNewsGuidancePrice TargetAnalyst Ratings
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