Why Informatica Corporation Shares Plunged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of data software technologist Informatica Corporation (NASDAQ: INFA  ) plummeted 13% today after its quarterly results and outlook disappointed Wall Street.

So what: Informatica shares have pulled back sharply in 2014 on signs of slowing growth, and today's in-line Q2 results -- EPS of $0.35 on a revenue increase of just 13% -- coupled with downbeat guidance only reinforce that trend. On the bright side, subscription revenue during the quarter spiked 43%, while operating margin expanded 100 basis points year over year to 13%, suggesting Informatica's competitive position remains solid.

Now what: Management now sees Q3 EPS of $0.30-$0.35 on revenue of $245 million-$260 million, versus the consensus of $0.37 and $261 million.

"I would like to recognize the Informatica team for achieving a significant corporate milestone: exceeding $1 billion dollars in revenue over the past 12-month period," Chairman and CEO Sohaib Abbasi said in a statement. "We are positioned for sustained growth with an expansive product portfolio and an innovation plan that are well-aligned with the strategic priorities of our customers."

More importantly, with Informatica still boasting a pristine balance sheet and beaten-down stock price -- now off 30% from its 52-week highs -- the downside seems limited enough to buy into that turnaround talk. 

Risk-free for 30 days: The Motley Fool's flagship service
Tom and David Gardner founded The Motley Fool over 20 years ago with the goal of helping the world invest...better. Their flagship service, Stock Advisor, has helped thousands of investors take control of their financial lives and beat the market. Click here to sign up today.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3044791, ~/Articles/ArticleHandler.aspx, 10/20/2014 4:24:47 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement