Please ensure Javascript is enabled for purposes of website accessibility

Why Cloudera's Shares Gained 13% in January

By Chris Neiger - Updated Feb 12, 2018 at 9:59AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors were still excited about the company's earnings report from December -- but the party didn't last long.

What happened

Shares of Cloudera, Inc. (CLDR) were up 13.3% in January, according to data provided by S&P Global Market Intelligence, as investors continued their optimism for the company after a strong fiscal third-quarter 2018 earnings report in December.

So what

Cloudera's shares have been on a wild ride since the company went public this past April, but investors started believing in this machine-learning and analytics software company when it announced its third-quarter results in December, and the sentiment carried through into January.

Cloudera's subscription sales grew by 48% in the quarter, and total revenue was up 41%, both on a year-over-year basis. Investors were likely pleased to see subscription sales continue to spike, because 83% of the company's total sales currently come from its subscription revenue.

Though the company's growing quickly, Cloudera still isn't profitable. Its GAAP loss in the third quarter was $56.6 million, and operating cash flow was negative $2.4 million.

Stock chart with blue lines on white background.

Image source: Getty Images.

Aside from the strong sales growth in the third quarter, investors may have also been motivated to push up Cloudera's share price after news came out in January that BlackRock, one of the world's largest mutual fund managers, more than doubled its stake in the company. BlackRock owned about 16 million shares of Cloudera at the end of the year, up from seven million previously, according to Barron's.

Now what

Unfortunately for Cloudera investors, the good times haven't extended into February. The company's shares have fallen about 9% since the beginning of the month, further proving that this software analytics company is still highly volatile.

Cloudera's management is estimating revenue to increase about 34.5% at the midpoint in the fourth quarter, and for subscription revenue to jump by 44.5%. That would be another strong quarter, to be sure, but investors should keep in mind that if the latest quarter didn't bring some share price stability to the company, then it's unlikely the next will either.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Cloudera Stock Quote

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.