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

Analyst Steps To The Sidelines On American Software Ahead Of Q1 Earnings
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Earnings Scheduled For September 4, 2018

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

The Analyst

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.

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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Latest Ratings for AMSWA

Sep 2018B. Riley FBRMaintainsNeutralNeutral
Aug 2018B. Riley FBRDowngradesBuyNeutral
Jun 2018B. Riley FBRMaintainsBuyBuy

View More Analyst Ratings for AMSWA
View the Latest Analyst Ratings

Posted-In: B. Riley FBR cloud Kevin LiuAnalyst Color Downgrades Previews Analyst Ratings Trading Ideas Best of Benzinga


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