The ongoing 5G revolution is projected to boost the usage of cloud computing and data analytics in the near term as the new technology facilitates improvements in artificial intelligence (AI), automation, and Internet of Things (IoT).
The global big data market is expected to grow at a 10.6% CAGR to hit $229.40 billion by 2025. Given 5G’s speed and data transfer capacity, almost every industry is expected to adopt the standard, triggering the so-called fourth industrial revolution globally.
As the commercial deployment of 5G across the country continues, big data companies are expected to witness surging demand for their software and services. We think that investors looking to capitalize on this trend could do well by investing in Teradata Corporation (TDC) and Cloudera, Inc. (CLDR).
Teradata Corporation (TDC)
TDC is a hybrid cloud analytics software provider. It is focused on delivering data intelligence to its customers. It provides Teradata Vantage, which is an analytics platform. It connects multiple sources of data for ecosystem simplification and delivers scale and integration.
The company’s non-GAAP gross profit for the fourth quarter ended December 31, 2020 increased 10.6% year-over-year to $291 million. Its non-GAAP operating income increased 39.6% from the same period last year to $67 million. TDC’s non-GAAP net income came in at $42 million, representing a 68% year-over-year increase. Its non-GAAP EPS increased 72.7% from the prior-year quarter to $0.40.
TDC’s EPS for the quarter ended March 31 is expected to increase 74% year-over-year to $0.47. Its revenue for the about-to-be-reported quarter is expected to increase 7.8% year-over-year to $467.72 million. Also, TDC surpassed consensus EPS estimates in all the trailing four quarters. On May 4, TDC announced a set of enhancements for Teradata Vantage on Google Cloud, making it easier for Teradata customers to use Google Cloud services in a consumption pricing model. The platform enhancements highlight TDC’s commitment to its Google Cloud offering and its commitment to provide Vantage customers with the choice, integration, and consistency they need to leverage its modern data platform in the cloud. The stock has gained 113.8% over the past year to close yesterday’s trading session at $48.20.
TDC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A grade for Value, and a B grade for Quality. TDC is ranked #1 of 3 stocks in the B-rated Technology-Storage industry.
Click here to access TDC’s ratings for Stability, Sentiment, Growth and Momentum.
Cloudera, Inc. (CLDR)
CLDR is a developer of platforms for data management, machine learning and advanced analytics. The company allows enterprises to operate, manage and move workloads across multiple architectures, mixing on premises and cloud environments, including all major public cloud infrastructure providers. It operates through two operating segments: subscription and services.
The company’s revenue came in at $226.60 million, indicating a 7% increase year-over-year for the fiscal fourth quarter ended January 31 Its gross profit rose 18.1% from its year-ago value to $183.30 million. Its non-GAAP income from operations stood at $50.50 million, with an increase of 359.1% year-over-year. Its operating cash flow came in at $36.70 million, a substantial improvement from the negative year-ago value.
The Street expects the company’s EPS for the quarter ended April 30 to increase by 60% year-over-year to $0.47. Revenue for its current fiscal year is expected to increase by 5.6% year-over-year to $917.80 million. Furthermore, it surpassed the consensus EPS estimates in each of the trailing four quarters.
On April 12, CLDR announced that its Data Platform will integrate the RAPIDS Accelerator for Apache Spark 3.0. deployed on NVIDIA Corp. (NVDA) computing platforms. This software should enable enterprises to accelerate data pipelines and push the performance boundaries of data and machine learning workflows to drive faster AI adoption and deliver better business outcomes.
The ML Prototypes in CDP launched earlier this year, combined with NVIDIA computing, accelerates data processing and model training at lower costs. The stock has gained 52.6% over the past year to close yesterday’s trading session at $11.90.
It’s no surprise that CLDR has an overall B rating, which equates to Buy in our POWR Ratings system. The stock has a B grade for Growth, Value and Quality. CLDR is ranked #14 of 59 stocks in the Software- Business industry.
Click here to see the additional POWR Ratings for CLDR (Momentum, Sentiment and Stability).
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TDC shares were trading at $40.15 per share on Friday afternoon, down $8.30 (-17.13%). Year-to-date, TDC has gained 78.68%, versus a 13.36% rise in the benchmark S&P 500 index during the same period.
About the Author: Ananyo Guha Niyogi
Ananyo’s ardent interest in capital markets, wealth management, and financial regulatory issues, led him to a career as an investment analyst. His goal is to educate individual investors by making complex financial issues easy to understand. More...
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