Shares Of Attunity Are Still Poised To Triple

| About: Attunity Ltd (ATTU)
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On Wednesday morning, Attunity (NASDAQ:ATTU) reported fourth quarter revenue of $7.1 million, up 24% from $5.7 million in the same period last year. License revenues increased at an even faster rate, rising 34% to $4.3 million from $3.2 million. Non-GAAP operating income increased 82% to $1.4 million and non-GAAP net income increased 100% to $1.5 million.

For 2013, Attunity's press release created a stir with analysts by guiding to a conservative 20% revenue growth. This suggests revenue of approximately $30.6 million. Meanwhile, non-GAAP operating income is expected to increase by 18-25% to $5.2 -5.5 million. That equates to 50-cents per share. This is very attractive for a Big Data stock trading at $7 per share, but the math wasn't spelled out in the press release, creating confusion among investors. Consequently, the shares sold off by 15% in early trading.

The earnings call provided hints and clarity into the company's thought process. Attunity's management team clearly exuded greater confidence on the call than in its press release. They disclosed that the company is winning the majority of its deals and taking market share as a result. Validating this comment, the company grew license revenue by 34% in Q4, which compares favorably to Gartner's estimate that the market is growing by about 30% annually.

Attunity's CEO went on to say that he is ramping the business to support $100 million in revenue, nearly four times its current level. To close the call, the company announced that Big Data representatives from EMC and Amazon (NASDAQ:AMZN) will be at its analyst conference today in NYC. All of this implies that 2013 guidance was set conservatively, laying the foundation for beat-and-raises throughout the year.

To summarize, aside from its "stated guidance", Attunity is showing great momentum in the Big Data space. At $7 per share, investors are currently paying less than 15x management's 2013 earnings guidance. The company is still growing license revenue at 30% annually and EPS at a much faster clip. Assuming 30% EPS growth and a PEG ratio of 1, the shares should be trading in excess of $15 per share.

Since our initial reports, less than one year ago, shares of ATTU have more than doubled from $3 to over $7 (see Software Earnings: Attunity Reports 100% Growth; Broadvision Looms and Attunity: A Big Quarter For Big Data, where we first proclaimed that ATTU was poised to triple).

ATTU's 52-week high is $9.75 and the company continues to take market share in the red hot Big Data space. Carefully weighing all factors, we believe the stock should revisit its highs in the near future. Thus, we continue to believe that shares of Attunity are poised to triple.

Disclosure: I am long ATTU. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.