So you think data warehousing is a stagnant, mature business? Teradata (NYSE: TDC) is proving you wrong on a regular basis.
The data-mining and warehousing expert beat analyst expectations once again last week, giving the stock another 5% single-day boost. That's a consistent pattern for Teradata, which still hasn't missed an analyst target since early 2008. Thanks to all these little jumps, the stock has now tripled since it was recommended to Stock Advisor subscribers in spring 2009.
In the just-reported fourth quarter, Teradata saw non-GAAP earnings increase by 6% year-over-year on 10% higher revenue. So far, so unimpressive. But cash flow from operations took a flying 63% leap over the same period, and the all-important free cash flows nearly doubled.
And 2011 looks to improve on most of these metrics. Management expects about 13% higher sales this year, while earnings should grow somewhat faster than that. Teradata is a market leader in a space that includes IBM (NYSE: IBM) and Oracle (Nasdaq: ORCL), and data warehousing solutions are not easily discarded and replaced. In other words, the rich get richer thanks to glue-like stickiness, and Teradata is already a Croesus.
Moreover, the need for intelligent data handling is only increasing as companies everywhere amass ever-growing quantities of raw business data. There will be a hockey-stick moment in Teradata's history sometime in the next couple of years when the need for these services hits home across enterprise-scale businesses worldwide. In this light, Teradata is akin to business-intelligence expert TIBCO Software (Nasdaq: TIBX), whose stock quadrupled as Teradata tripled.
Data-handling software is changing the face of business, and it's not too late to buy into one of the few companies that provide all the right tools. Read more in a free report that we like to call "The Only Stock You Need To Profit From the NEW Technology Revolution," and you'll see what I mean.
