Qlik Technologies Gains Despite Eurozone Worries (QLIK)

The business intelligence software provider, Qlik Technologies (NASDAQ: QLIK), which derives around 60% of its revenue from Europe, gained on anticipation of favorable third-quarter results and a stock upgrade from UBS.

The Pennsylvania-based Qlik is engaged in the development, commercialization and implementation of software products and related services for user-driven business intelligence. The company’s QlikView Business Discovery platform assists to create and share insights and analysis in groups and across organizations.

Earlier in January 2012, the stock started to rise from around $24.00, following an upgrade from analysts at Jefferies & Co. The event was closely followed by a Seeking Alpha report listing Qlik as one of the 15 stocks that is likely to outperform in the future. For the first time since July 2011, the share price touched a peak of $31.00 on February 16, 2012. With no further positive news, the stock struggled to get past the $31.00 mark in the next two months. On April 30, 2012, a detailed analysis of the fiscal 2012 first-quarter result pointed out the 21.9% rise in marketing costs, 32.4% increase in R&D expenditures, and 52.5% increase in general and administrative expenses. The report also underlined the increase in expenditure by 29.8% against a rise in revenue by only 25.6%. In the weeks that followed, the stock price spiraled down to reach $22.00 by the first week of June 2012.

Adding to the woe, the stock was downgraded by The Street Ratings from “hold” to “sell” on June 7. Research firm Jefferies followed suit by downgrading the stock to “hold” from “buy” on July 2, 2012. With a poor sentiment behind, the stock fell to $18.00 by the dawn of July 2012. Qlik, meanwhile, had bought privately held data management software company Expressor Software on undisclosed financial terms.

Qlik sprung a surprise on July 26, when it reported better-than-expected second-quarter results and a strong annual guidance. The company posted a 20% constant-currency growth amidst the turmoil in Europe. The second-quarter result revived the fortunes of the stock, which bounced back to $23.00 in three weeks’ time. Two days before the release of second-quarter results, Qlik joined Google’s cloud platform partner program. Following the bullish view of Morgan Stanley, the share price of Qlik further rallied to $25.28 on September 14, 2012.

The share price retraced to $21.90 by the end of September, still higher than $21.10 at the close of August 31, 2012. The company announced on October 3, 2012, that the world’s largest survey of independent business intelligence users placed Qlik Technologies in first place in visual analysis, innovation and agility among business intelligence giants. The Business Application Research Center (BARC) conducted the survey. The survey report brought the market’s attention back to the stock, which was trading at $19.00 at the time.

Option MONSTER’s Heat Seeker system showed that 5,384 October 21 calls were traded in a strong buying pattern on October 5, 2012. Qlik is expected to report the third-quarter results on October 25, 2012. Today, UBS upgraded Qlik to “buy” from “neutral” with a price target of $28.00.

Qlik ended the day at $21.37 per share, up $1.10 or 5.4% on a volume of 3.2 million shares.

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Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.