Analyst Steps To The Sidelines On American Software Ahead Of Q1 Earnings


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American Software, Inc. (NASDAQ:AMSWA) is scheduled to release its first-quarter earnings report on Sept. 4.

The Analyst

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B. Riley FBR analyst Kevin Liu downgraded American Software from Buy to Neutral after the stock hit his $18 price target.

The Thesis

According to Liu, the company’s transition to the cloud will likely result in the sequential and year-over-year drop in license fees.

“We also model a significant Y/Y increase in services, which we believe limits potential upside on the top line. As for the SaaS transition, we expect another sequential increase in cloud bookings, which should result in cumulative cloud services ACV nearly doubling from the year ago period. In sum, we think 1Q results will exhibit similar trends to recent quarters,” Liu said in a note.


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Despite Liu’s optimism in regards to American Software’s long-term projections, he doesn't anticipate estimates rising much higher after the results.

Liu's team of analysts expects total revenues of $28.7 million, up roughly 6 percent year-over-year. In addition, he anticipates cloud services to amount to $14.5 million, consistent with last quarter levels.

“We acknowledge, however, that the combination of seasonality, mounting concerns regarding trade disputes, and our projected services growth rate suggests limited potential for upside in 1Q,” Liu said.

Price Action

Shares were down 4 percent at $18.19 Tuesday afternoon.

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27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


Posted In: Analyst ColorDowngradesPreviewsAnalyst RatingsTrading IdeasB. Riley FBRcloudKevin Liusoftware