Mobileiron Upgraded By Imperial Capital On 'Faster-Than-Expected' Turnaround

Mobileiron Inc MOBL reported fourth-quarter results Feb. 8 that not only exceeded expectations, but signaled ongoing progress in a turnaround initiative, according to Wall Street's newest bull.

The Analyst

Imperial Capital's Michael Kim upgraded Mobileiron's stock rating from In-Line to Outperform with a price target boosted from $4 to $5.75.

The Thesis

Mobileiron said in its Q4 report that it broke even on revenue of $48.8 million, which exceeded expectations of a 3-cents-per-share loss on revenue of $46.8 million, Kim said in a Monday note. 

The analyst highlighted other metrics in Mobileiron's Q4:

• Subscription revenue increased 16 percent to $19 million and accounted for 39 percent of revenue.
• Gross billings grew 9 percent year-over-year to $60.3 million against guidance of $55 to $58 million.
• Recurring billings grew 15 percent to $45.6 million and accounted for 76 percent of gross billings.

Mobileiron's encouraging quarter could be attributed to management's faster-than-expected turnaround progress, and the company's guidance for the first quarter reflects ongoing improvements under a new executive leadership team, Kim said.

The company's new global sales leader is making constructive changes without incurring elevated attrition inside of the sales organization, he said. 

Investors are likely to become "increasingly constructive" on the stock given its ongoing turnaround progress, accelerating recurring revenue and profitability inflection that will result in higher cash flow, according to Imperial Capital. 

Price Action

Shares of Mobileiron were down more than 1 percent at $4.75 Tuesday morning. 

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