Wunderlich’s Bill Choi believes Mobileiron Inc MOBL shifting its purchasing patterns from perpetual licenses to term subscription, along with continued competitive pressures, would make it difficult for the company to outperform via consistent execution.
Choi downgraded the rating on the company from Buy to Hold, while lowering the price target from $7 to $3.
Challenges
The analyst said, “more customers are choosing to bundle MDM/EMM functionality in with larger platform purchases, which creates an uphill battle for standalone vendors such as MobileIron. Combining this with MOBL's inconsistent history of execution and high management turnover, we believe any upside to current valuations remains limited.”
Choi noted bulls argue that MobileIron’s commitment to reaching cash flow breakeven by Q4:16 would be a catalyst for the stock and that the stock’s deeply discounted valuation would create upside from an M&A perspective.
Management Turnover
On the other hand, bears believe that over the last 12–18 months, the company has seen two CEOs, two CFOs and three heads of sales, while its head of engineering and chief strategy officer have also been replaced.
This has led to inconsistent performance, which is detrimental to the stock’s performance.
Competition
In addition, unlike its primary competitor, AirWatch, MobileIron continues to be a stand-alone entity, “which limits its ability to compete for large deals,” Choi stated.
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