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Cloudera: Compelling Valuation With Multiple Ways To Win

Mar. 10, 2020 12:22 PM ETCloudera, Inc. (CLDR)11 Comments


  • Dramatically undervalued – EV/FY2021 Sales ~1.9X which is a ~70% discount to highly comparable SaaS peers with similar growth and market characteristics.
  • ~$100+ million in free cash flow this year. Currently ~$500 million in net cash.
  • Massive total addressable market of ~$26 billion estimated to double to ~$52 billion in the next 3 years.
  • Attractive acquisition target for PE and numerous strategic parties with Icahn owning 19% with 2 board seats including Chairman.
  • Only true hybrid and multi-cloud company (makes sure data in private, public, hybrid and multi-clouds work together) with new transformative products that are the hidden gem of cloudification.

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Key Points

Current Value

  • Current Enterprise Value (~$1.6 billion) is ~1.9x FY 2021 revenue v. ~6.2x for its SaaS peers that are highly comparable with similar growth and market characteristics. Although, ~40% of the comparable companies generate a negative cash flow and most don’t have as large a TAM or transformational new products
  • $785 million - $795 million in FY 2020 expected revenue (year ending 1/31/20)
  • FY 2021 guidance – We estimate the company will guide revenue growth of ~10% to $865 million to $880 million. We believe they will guide solely based upon their large, highly stable current customers making achieving that growth rate nearly 100% assured.
    • We believe the Company will internally target >15% growth to $900 million to $930 million (>50% above their anticipated ~10% guidance). The following will drive incremental revenue above the 10% guide:
      1. CDP Public Cloud, which has already been released to tremendous customer reviews
      2. CDP Private Cloud - scheduled to be launched in 2Q
      3. Cloudera’s proprietary binaries are now behind a paywall, which will drive new streams of revenue
      4. New customers
  • Expect ~$100 million in Free Cash Flow in FY 2021 (internal targets are likely $115 million - $125 million). This equates to a 11.5% Free Cash Flow margin
  • Stock down ~36.4% year-to-date absent any company specific news
  • This business is relatively insensitive to COVID-19


  • Growth will accelerate with transformational new products being released
    • CDP (Cloudera Data Platform) is unlike any other enterprise data solution and solves what enterprises need for private, public, hybrid, & multi-cloud environments

This article was written by

Long-Biased with a goal of finding opportunities where the odds are asymmetrically in our favor

Analyst’s Disclosure: I am/we are long CLDR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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Comments (11)

Your articles are incredibly thorough, and I thank you for all your hard work. I also wanted to suggest you consider ASTS, which is another potentially asymmetric opportunity that I’m sure you could shine a big spotlight on if you chose to cover it. Thanks again
What a comprehensive and beautiful piece! A financial perspective tour de force. Thanks much.
I really enjoyed your indepth analysis of CLDR. I am long and agree with your thesis about the company and the current risk / reward situation.
Congratulations and very appreciative of your work! It was more than a good read
Article as thorough as they come. This author's followers guidance looks very optimistic well into the future. One of my top purchases - in at $5.06 after "perfect storm". Nice bright spot in current storm.
Steven Borovay, CFP profile picture
Excellent article written before today's release and hit it right on with Icahn's requesting CLDR buyback shares. The potential red flags pointed out for the most part were squashed.
10 Mar. 2020
Here’s an article that is spot on when looking back after the earnings report. Keep up the great work!
One of the best articles I’ve read on Seeking Alpha. Truly encapsulates the entire story of Cloudera, including risks. Thank you very much for your insights.
Wonderful analysis. One of the most comprehensive I have read on Seeking Alpha.
Great article with lot of content. will see the Q4 Earnings of CLDR in couple of hours.
Nice article hope turnaround
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