Qlik Technologies (NASDAQ:QLIK), through its subsidiaries, sells software solutions that deliver data analysis and reporting solutions. Its software platform, QlikView, combines enterprise-class analytics and search functionality.
QLIK has ridden the wave of the cloud-hype since its IPO, and has soared over 24% in the past month, fueled by recent acquisition hype in the technology / cloud section spurred by Oracle’s (NYSE:ORCL) recent takeover of RightNow (NASDAQ:RNOW).
QLIK’s recent results, (Q3-11) as reported on 27 October 2011, highlighted a “strong” 50% y/y growth in revenue and an earnings beat. Following these results, I recently exposed some fallacies in the company's earnings “beat.” These included the fact that expenses growth outpaced revenue growth, y/y earnings were positively impacted by foreign currency gains, and dilution has run rampant.
Perhaps corporate insiders have increased confidence in QLIK’s value? Apparently not.
Over the past 6 months, according to Yahoo Finance, insiders have sold a net 19.66M shares, amounting to 37.4% of all insider ownership. Option grants are a likely reason for smaller levels of insider sales, but 37.4% is an anamoly. Netflix (NASDAQ:NFLX)-- which has been dumped by insiders over the past months-- only has a 18.6% sell-off rate. RightNow (RNOW) only had a 10.5% sell-off rate, which obviously shows more confidence in the value of the company.
The bottom line is that QLIK is extremely overvalued and is ready to drop. If QLIK does not adjust soon due to continuing insider sales pressure, then the Q4-11 exposure will drop the stock. QLIK is predicting a $.30 EPS for FY11, yet the company has lost $.05 YTD. $0.35 EPS in Q4-11 is an enormous target compared to previous results.
Disclosure: I am short QLIK via several Nov11 - Feb12 options.