Analysts at D.A Davidson upgraded their rating on Hortonworks stock from a Neutral to a Buy on the back of valuation
Hortonworks Inc (NASDAQ:HDP) stock surged more than 11%in today’s trading session, after analysts at D.A Davidson bumped their rating on the company from a Neutral to a Buy based on valuation. Shares of the enterprise software company have been on a slippery slope since the start of 2016, falling a little over 42% especially after Hortonworks announced to sell $100 million worth common stock.
Analysts at D.A Davidson maintained its $13 twelve-month price target on the stock, citing continued expansion in the company’s ecosystem. Additionally, the research firm expects Hortonworks to lower its cash burn significantly by the second quarter of fiscal year 2016.
The provider of advanced enterprise software solutions has previously posted mixed top and bottom line results for its first quarter. Hortonworks managed to generate $41.3 million in total revenues, compared to the Street’s expectations of $39.5 million. However, the company posted adjusted loss per share (LPS) of 68 cents coming in line with its consensus estimates.
In addition to muted quarterly earnings, Hortonworks also provided weak guidance for its current quarter, lowering the investor confidence on the software provider. The company expects to generate $45 million in total revenues during its current quarter, missing the Street’s estimates of $45.15 million. Analysts at Credit Suisse came to the company’s defense, reiterating their bullish stance following its weak first quarter earnings call.
Last week, analysts at JMP Securities also launched positive comments regarding future prospects of the company, reaffirming an Outperform rating along with a price target of $25. The research firm also highlighted results from its recent channel checks which indicated increased Hadoop adoption from the customers. Hortonworks stock has slumped nearly 34% in the last six months, compared to Nasdaq Composite Index which rose almost 8% in the similar time frame.