Options Trade – Qlik Technologies Inc (NASDAQ:QLIK) Calls
Monday, July 28, 2014

**OPTIONS TRADE: Buy the QLIK Nov 2014 30.000 call (QLIK141122C00030000) at or under $1.40, good for the day. Place a protective stop limit at $0.55 and a pre-determined sell at $3.00.

by Ian Harvey

July 28, 2014

Introduction

Qlik Technologies Inc (NASDAQ: QLIK) shares surged 12% Friday after the business analytics software specialist's quarterly results topped Wall Street expectations.

Qlik shares have pulled back sharply in recent months on signs of slowing growth, but Friday's solid Q2 results -- adjusted EPS of $0.02 on a revenue surge of 22% -- coupled with in-line guidance suggests that demand for its flagship product, QlikView, remains strong. Additionally, the market-topping quarter should take some pressure off the rest of the year for its recently launched next-generation application, Qlik Sense.

Earnings

Management now sees Q3 revenue of $122 million-$126 million, bracketing the average analyst estimate of $123.3 million. "[Thursday] we introduced our next-generation data visualization application, Qlik Sense Desktop, which is the first commercially available release from the QlikView.Next project, and we announced that we expect the server edition of Qlik Sense to be available in September," said CEO Lars Bjork. "The launch of Qlik Sense, combined with the continued strong demand for QlikView demonstrated by our results this quarter, will enable us to capture the significant market opportunity that we see in self-service visualization and Data Discovery."

Every Qlik segment recorded revenues that increased YoY: Licensing revenues rose almost 11%, Maintenance revenues increased 32.5%, and revenues from Professional Services were almost 50% higher.

Encouraged by a robust earnings announcement and estimating continued strong demand for QlikView, the company announced strong full-year guidance. Revenues are projected to be $545-555 million; taken at the midpoint, the revenue would be higher than the consensus estimate of $548 million. Per-share earnings are expected to be in line with the Street’s estimates at $0.23-0.25.

Analysts Opinions

Equities research analysts at FBR Capital Markets hoisted their price target on shares of Qlik Technologies (NASDAQ:QLIK) from $24.00 to $27.00 in a research note issued to investors on Friday. The firm currently has a “market perform” rating on the stock. FBR Capital Markets’ price objective suggests a potential upside of 15.43% from the stock’s previous close.

The company has been the subject of a number of other research reports:-

• Analysts at Barclays upgraded shares of Qlik Technologies from an “equal weight” rating to an “overweight” rating in a research note on Monday. They now have a $31.00 price target on the stock. They noted that the move was a valuation call.

• Separately, analysts at BMO Capital Markets initiated coverage on shares of Qlik Technologies in a research note on Thursday, July 17th. They set a “market perform” rating and a $22.00 price target on the stock.

• Finally, analysts at Deutsche Bank cut their price target on shares of Qlik Technologies from $28.00 to $26.00 in a research note on Tuesday, July 15th. They now have a “hold” rating on the stock.

One equities research analyst has rated the stock with a sell rating, eight have assigned a hold rating and twelve have assigned a buy rating to the stock. The stock presently has a consensus rating of “Buy” and an average price target of $31.01.

Conclusion

The strong earnings announcement came on the back of robust demand for the company’s business analytics software, QlikViews. The software helps companies organize a large amount of data into info-graphics, reports, and charts. The Coca-Cola Company (KO) and American Apparel Inc (APP) use QlikViews.

Most importantly, with Qlik shares still off about 30% from their 52-week highs, there's plenty of upside left to buy into that bullishness.

Therefore, based on the facts above the following options trade is recommended…..


**OPTIONS TRADE: Buy the QLIK Nov 2014 30.000 call (QLIK141122C00030000) at or under $1.40, good for the day. Place a protective stop limit at $0.55 and a pre-determined sell at $3.00.



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