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The market is awash with IPO frenzy while profitless companies trading for insane revenue multiples are surging to multi-billion dollar valuations. Meanwhile, analysts from the top firms (Goldman Sachs, Morgan Stanley, etc.) are tripping over themselves to assign higher and higher price targets to these “companies of the future." Sound like 1998-99? It does to me. However, I am simply describing the markets of 2011 and the newfound fascination for cloud technology.

We are currently surrounded by companies that meet the above “bubble criteria” such as $1.72B OpenTable (NASDAQ:OPEN), $4.23B Renren (NYSE:RENN), $9.51B Linkedin (NYSE:LNKD), and $2.58B Pandora (NYSE:P). Collectively these companies are “worth” more than the individual GDP of 110 different countries, but don’t produce enough combined profits to buy a Value Meal from McDonald's.

What QLIK Technologies (NASDAQ:QLIK) Does

According to Google Finance, Qlik Technologies, “through its subsidiaries, sells solftware solututions that deliver data analysis and reporting solutions. Its software platform, QlikView, combines enterprise-class analytics and search functionality.” While it is disturbing enough that a multi-billion dollar company cannot attain a correct spelling of its number one function, the ultimately disturbing factors lie in the underlying valuation of this stock.

Valuation Multiples

QLIK is currently trading at a price/sales multiple of 10.7, which sounds high by itself until the (company projected) price/earnings ratio (110+) is brought out. As high as the company’s projected P/E ratio is, it appears that the actual current P/E is not even a positive number.

Performance

So far in 2011 (2Q results were posted on July 28), contrary to previous company estimations, QLIK has succeeded in losing $6.7M on revenues of $137M. But it’s normal for a growing tech company to experience losses in its first few years, right?

The problem with the developing tech approach is that QLIK earned $3.4M on $95M in revenue during the first two quarters last year, and has been focused on its technology for 18 years. Once again, Wall Street analysts seem to miss the point that growing revenue is worthless if the profits decrease in the process. QlikTech bills itself as “A New Kind of Software Company,” and touts 186% ROI for its customers (it doesn’t mention that it somehow forgot to keep any of the ROI for itself).

Once everyone wakes up from dreaming “in the clouds,” look out below for QLIK.

Source: Qlik: A 'Cloudy' Future