This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Callidus Rides Surprise Profit to New Highs

Stocks in this article: CALD

NEW YORK ( TheStreet) -- Shares of Callidus Software (CALD) leapt to their best levels in more than two years Friday after the Pleasanton, Calif.-based maker of salesforce management software posted a surprise profit for the September quarter, and at least one analyst is saying they still look like a bargain.

After Thursday's closing bell, Callidus said it earned $400,000, or a penny per share, in the three months ended Sept. 30 on a non-GAAP generally accepted accounting principles basis, which typically excludes one-time items and expenses related to stock-based compensation.

Third-quarter revenue swelled 8% on a sequential basis to $18.5 million as recurring revenue from subscriptions and support increased 18% to $13.2 million, or roughly 72% to total revenue. Gross margins were a bright spot as well, rising to 46% in the latest quarter from 40% in the second quarter, and 37% last year.

Wall Street was looking for a loss of 2 cents a share in the quarter on revenue of $17.5 million.

The stock finished up 41 cents, or 9%, to finish at $4.91 with volume of roughly 880,000 running at almost six times the issue's trailing three-month daily average of around 143,000. The session-high of $5.05 was the first time the stock broke above $5 since mid-2008, and it's now risen just shy of 50% in 2010 alone. At current levels, the stock has made a convincing break above both its 50- and 200-day moving averages of $4.24 and $3.52 respectively.

Wedbush Morgan maintained an outperform rating on the stock with a $7 price target in the wake of the report, calling the company's ability to turn a profit a full quarter ahead of its own guidance "a major milestone" and saying the shares have room to run from here.

"With the shares currently trading at less than 1.5x EV enterprise value /Sales, and the company now profitable, we believe CALD shares are severely undervalued relative to those of its recurring revenue peers, and we recommend investors purchase the shares aggressively at the current price," the firm said.

While the third-quarter profit was impressive, Wedbush was just as enthused about the fact that Callidus said it expects to stay in the black in the current quarter.

"Equally important, in our view, is that management guided Q4 revenue in line with consensus and also guided to another profitable quarter," the firm said. "Based on their Q4 guidance, Callidus management expects Q4 revenue growth yr/yr to be between 16-22%, a solid rate which we believe could continue into 2011."

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs