Indices are negative as stronger GDP data is pointing to Taper.
S&P 500 @ 1784.66, low 1784.35
Internals are negative
Oil UP 26 cents
Gold Down $21.40
Canadian $ UP 26 tick @ 93.95
VIX UP 4.29% @ 15.33
Portfolio ARUN JKS QIHU SINA AUY
Most stocks are down
@ 2.58 following are green :
SB BLOX EXPE TSLA LUV KORS
AAPL LULU TWTR YHOO CMG
EBAY LNKD LVS MA YNDX
CRUS BRCM AMCC CIEN
FNSR SPLK SBUX STLD
X WUBA CSOD WLT
Z WYNN RALY
MLNX...
BLOG does NOT give buy or sell.
Saleem
5 comments:
Hey Saleem,
Investor's Intelligence numbers going even further extended bullish but the AAII numbers moderated some.
Stocktrader
Hi Stocktrader,
This week by Friday...we are correcting froth in a big way....
Saleem
Hey Saleem,
RALY issued preliminary conservative guidance for FY 2015 (which is basically 2014, Feb 2014-Jan 2015) above consensus, 26% revenue growth versus ~23% expected right now. Some analysts were concerned about this quarter's sequential decrease in deferred revenue and low sequential seat growth, but apparently Q3s are always seasonally difficult for RALY (I'll have to read the transcript later to clarify but I believe an analyst mentioned every Q3 for the last 4 years had sequential deferred revenue declines). Management didn't blame anything, but I wonder if the government shutdown and debt ceiling debacle well into October shifted the sales cycle just enough to cause a very slight problem, although revenues came in above expectations anyways.
Overall, the story seems very intact and large deals signed in the quarter are good examples of this. Year-to-date their $ win rate against IBM is 95% (and if I remember correctly from the last call, the ones they lose are the lowest end where the client doesn't want the robust features and price).
The key to RALY is that they always start with small wins, and their expand potential is large. For example, their very large client win this quarter signed up for 1500 seats, but the total potential is ~15000. This leaves a lot of runway for both new clients, but also very much upsells to existing clients.
They have designated VPs in the Singapore and Australia starting this quarter to help them expand internationally, which is probably part of the increased guidance for next year: more focused efforts and market understanding of the potential there.
They have large hiring plans for this year and next to capitalize on the growing market opportunity both domestically and abroad. More and more companies are starting to utilize the Agile methodology.
RALY seems to be at a key intersection of both a growing market and a cloud transition for many companies. Their niche is specialized enough that no one is really competing on a large scale, leaving the greenfield opportunities for mostly RALY alone. I don't see how the stock market can continue to overlook this small guy! :)
Stocktrader
Hey Saleem,
The replay started quickly so I was able to verify: it was indeed the Piper Jaffray analyst that indicated the sequential deferred revenue declined in Q3 for the last four years (and also mentioned the deceleration in paid seats also the last four years). So, it doesn't seem like there's much cause for alarm in those respects.
One thing I forgot to mention: given their recent sales head departure and transition, many investors were concerned about a forward sales guidance problem (since MODN had the same thing happen and totally crashed). RALY alleviated that concern totally, and although they didn't want to say anything bad about their prior employee, based on their comments I think they like the new guy better in terms of discipline and structure in the sales process as they look to take the next stage in their company's growth.
Stocktrader
Hi Stocktrader,
Thanks for your detailed analysis of RALY earnings report & future guidance.....
Looks like RALY is on the right track of growth.
Saleem
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