Market Overview

Carl Icahn Takes Stake In Cloudera, But Wells Fargo Says Outlook Still Murky

Share:
Carl Icahn Takes Stake In Cloudera, But Wells Fargo Says Outlook Still Murky

After Thursday’s market close, an SEC filing disclosed that activist investor Carl Icahn had taken an aggregate 12.6% stake in software company Cloudera Inc (NYSE: CLDR).

Although the stock valuation is near trough levels, there is uncertainty around a key catalyst, according to Wells Fargo: customer adoption of the Cloudera Data Platform. 

The Analyst

Philip Winslow maintained a Market Perform rating on Cloudera and set an $8 price target. 

The Thesis

Although Icahn may wish to unlock shareholder value, there are factors that limit the potential, Winslow said in a Thursday note. (See his track record here.) 

Prior to Cloudera’s merger with Hortonworks, the two companies were approached separately by private equity investors to combine the entities, the analyst said, adding that Hortonworks was also approached by a strategic buyer about an acquisition. 

“Although these transactions did not ultimately transpire, we believe this prior interest underscores the potential value of the new Cloudera in terms of its leadership position in the Hadoop/Spark ecosystem,” he said. 

Icahn may try to re-engage with strategic or financial acquirers to sell Cloudera, Winslow said.

The company witnessed an unprecedented 16% dollar churn in the first quarter, significantly higher than its historical average of 10% or less, the analyst said. 

The company expects this high churn level to continue during the second quarter, he said.

Such a high level of revenue attrition could dissuade both financial and strategic acquirers, according to Wells Fargo.

The cloud data platform has yet to be released as a cloud-native service and as a private cloud offering, and customer adoption is uncertain, Winslow said. 

Price Action

Cloudera shares were trading higher by 2.91% to $6.54 at the time of publication Friday. 

Related Links: 

26 Technology Stocks Moving In Today's Pre-Market Session

48 Stocks Moving In Friday's Pre-Market Session

Photo courtesy of Cloudera. 

Latest Ratings for CLDR

DateFirmActionFromTo
Sep 2019MaintainsNeutral
Sep 2019MaintainsNeutral
Sep 2019MaintainsBuy

View More Analyst Ratings for CLDR
View the Latest Analyst Ratings

Posted-In: Carl Icahn Philip Winslow Wells FargoAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

 

Related Articles (CLDR)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
MUCascendReiterates65.0
ALDRCanaccord GenuityDowngrades20.0
LEGHLake StreetInitiates Coverage On21.0
CHUGoldman SachsUpgrades13.2
STZBMO CapitalMaintains230.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Trade War Is Back On: Time To Check Warehousing Markets

Canadian Pacific Smashes Grain Volume Records In 2018-2019