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.
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"We believe that NetSuite can retain its market leadership with small and medium businesses, though we think NetSuite will have a harder time breaking into larger business," analyst Bachman wrote in a note.
Mid-Market Leader, But Not 'Enterprise Ready'
The analyst also disagreed with some market thoughts that "Oracle and SAP will place increasing pressure on NetSuite in the mid-market." But, the analyst warned that customers that have Oracle or SAP as their core ERP "will increasingly be more likely to use Oracle's or SAP's cloud ERP for their subsidiaries rather than NetSuite to reduce complexity."
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Bachman further highlighted the company's international growth potential and said NetSuite "will be able to maintain about 30 percent y/y growth for the next two years from international markets, while domestic growth will be 31 percent in 2016 and 27 percent in 2017."
However, the analyst is concerned that NetSuite "does not have product leadership in any area and lacks some necessary functionality to be considered a scalable enterprise suite."
"And without a strong SI network, in our view, breaking into enterprises will be difficult. Therefore, we think the enterprise market is still out of reach for NetSuite and that it will most likely stay a mid-market player," Bachman said.
Looking Forward, Estimates
For the second quarter, the analyst sees up-sell revenue to improve to $13 million or higher following the minimal up-sell revenue in the first quarter of $6.6 million.
Bachman estimates total available market (TAM) for NetSuite at about $13.4 billion for 2016 and $14.4 billion for 2017. The analyst expects NetSuite's subscription revenue at about $769 million in FY2016, which would represent about a 6 percent market share.
The analyst expects EPS of $0.47 on revenue of $968.5 million for 2016 versus the Street's estimates of $0.45/$967.1 million. Bachman projects revenue growth of 31 percent in FY2016 and 28 percent in FY2017.
According to TipRanks, Bachman has a success rate of 59 percent with an average return per recommendation of +14.3 percent. The analyst is ranked 93 out of 3,974 analysts.
Shares of NetSuite closed Tuesday's regular trading at $77.41, down 1.80 percent on the day.
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.