Shares of Qlik Technologies (NAS: QLIK) fell as much as 14% Friday after reporting worse-than-expected results the night before. The stock is down more than 22% year to date, sharply underperforming the S&P 500 over the same period.
Both revenue and profit came in well below forecasts -- for Qlik, the second time in four quarters:
Q3 2012 Estimate
Q3 2012 Actual
Adjusted earnings per share
Source: S&P Capital IQ.
More frustrating than the miss is Qlik's record. Revenue growth has slowed in each of the past five quarters -- from 50.2% in last year's Q3 to 14% this year. Interestingly, gross margin has held steady throughout that period, which suggests Qlik is paying a price for demanding a premium for its wares.
Source: S&P Capital IQ and The Motley Fool.
The good news? Competitors may not be faring much better. MicroStrategy (NAS: MSTR) has missed estimates in two of the past four quarters, while Actuate (NAS: BIRT) came in light during Q2. More recently, MicroStrategy revealed a management shake-up that raises questions about the company's third-quarter results due on Oct. 29.
And yet MicroStrategy's potential struggles pale in comparison to the real problems facing Qlik, a purported innovator I publicly backed as the best tech stock for 2011. Growth is decelerating exactly when it should be accelerating.
For his part, CEO Lars Bjork cited a "challenging business environment" that made it more difficult to sell to large accounts. Is that a fair excuse? Perhaps. At this point, what matters is that maintenance revenue (i.e., sales of upgrades and support) grew at a currency-adjusted 41%, while license revenue (i.e., sales to new accounts) grew 13% on the same basis. License revenue should be the bigger contributor. Instead, Qlik looks like the Oracle (NAS: ORCL) of its industry. The database king derived 51% of revenue from license upgrades and support in the quarter ended on Aug. 31.
A new deal with Teradata (NYS: TDC) for allowing Qlik users to do rapid visual analysis of Big Data may help to reignite growth, but recent history cautions me to presume nothing. I've made a bad call on this stock so far.
My next step is to reach out to business intelligence experts and users and assess the substitutes. Does Qlik still possess the technical advantages I cited when picking the stock for our Motley Fool Rule Breakers service? I'll post what I find out, so stay tuned to Fool.com for updates.
However, you needn't wait on me if you're looking for ways to profit from the Big Data trend. Our tech analysts released a special report that digs deeper into Teradata's risks and opportunities while providing specific guidance on how to profit from rising interest in Big Data tools. Click here to get your copy instantly -- it's free.
The article Is This the Worst Call I've Ever Made? originally appeared on Fool.com.
Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Qlik Technologies at the time of publication. Check out Tim's web home, portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool owns shares of Oracle. Motley Fool newsletter services have recommended buying shares of Teradata and Qlik Technologies. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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