Why Qlik Technologies (QLIK) Stock Is Down Today

NEW YORK (TheStreet) -- Qlik Technologies (QLIK) was falling 9.8% to $22.16 Friday after missing analysts' expectations for revenue in the first quarter.

For the first quarter Qlik posted a loss of -12 cents a share, beating analysts' estimates of a loss of -13 cents a share by 1 cent. Revenue grew 15.1% from the year-ago quarter to $111.1 million. Analysts surveyed by Thomson Reuters expected revenue of $113.22 million for the quarter.

Looking to the second quarter the company expects revenue of between $124 million and $128 million and a loss of between -4 cents and -2 cents a share, both in-line with analysts' estimates for the quarter.

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TheStreet Ratings team rates QLIK TECHNOLOGIES INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate QLIK TECHNOLOGIES INC (QLIK) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • QLIK's revenue growth has slightly outpaced the industry average of 11.6%. Since the same quarter one year prior, revenues rose by 17.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • QLIK has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, QLIK has a quick ratio of 2.12, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for QLIK TECHNOLOGIES INC is currently very high, coming in at 90.35%. Regardless of QLIK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, QLIK's net profit margin of 5.11% is significantly lower than the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 37.6% when compared to the same quarter one year ago, falling from $13.27 million to $8.28 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Software industry and the overall market, QLIK TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: QLIK Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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