Deutsche Bank Starts MobileIron at Buy On A Series of Catalysts

Deutsche Bank is one of five research houses to start coverage of MobileIron MOBL. Deutsche Bank has a buy rating and $13 price target (32.4 percent upside) on the stock.

Deutsche Bank’s research note says 475 million smartphones and tablets are expected to be deployed to enterprises (crucial for MobileIron’s success) in 2014 and comments that MobileIron is winning a significant portion of new device activations. Analyst Karl Keirstead further writes, “Other key catalysts include the potential migration away from BlackBerry to MOBL as well as MOBL’s mix shift beyond core MDM to more 'value-add' services, resulting in higher ASPs going forward.”

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Key concerns for MobileIron are also outlined by Keirstead. Competition is one of the most concerning factors, but “we also wonder whether enterprises will only use MOBL and rival platforms to manage a subset of their installed device bases and/or whether per device pricing declines, reducing the TAM. In terms of the financials, we worry about a 2H14 billings/revs deceleration and the size of the non-GAAP operating loss.”

The $13 price target is based on 6.5 times EV/Sales, which is slightly higher than the recent IPO median.

Shares of MobileIron are are 7.64 percent on the series of initiations to $10.57 in Monday’s premarket trading.