Stocks’ Details

Alteryx, Inc.

Guidance Updated: Alteryx, Inc. (NYSE: AYX) is a leader in analytic process automation and helps organizations in delivering high-impact business outcomes and the rapid upskilling of their modern workforce. As on 8 January 2021, the company’s market capitalization stood at ~$7.75 billion. On 4 January 2021, the company announced the appointment of Dean Darwin as new its Chief Revenue Officer. The company has updated its guidance, and it now expects its Q4FY20 revenue to be in the range of $155.0 million and $158.0 million, representing a year-over-year change of (1.0%) to 1.0%. Notably, this guidance is ahead of the previously issued guidance of $146.0 million to $150.0 million. For the full year, the company expects its revenue to be between $490.0 million to $493.0 million, representing 17% to 18% YoY growth. The company intends to release in Q4FY20 results and full-year FY20 results on 9 February 2021. 

Q3FY20 Result Highlights: For Q3FY20, the company reported revenue of $129.7 million, up 25% on pcp. Further, the company’s gross profit for the quarter stood at $119.3 million, higher than $93.8 million in pcp. During the quarter, the company added 241 net new customers. At the end of the quarter, the company had 6,955 customers, up 24% on pcp. As at 30 September 2020, the company had cash and cash equivalent of $95.95 million.

Q3FY20 Result Highlights (Source: Company Reports)

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

EV/Sales Multiple Based Valuation (Source: Refinitiv, Thomson Reuters)

Note: All the forecasted figures are taken from Thomson Reuters, NTM: Next Twelve Month

Stock Recommendation: The stock of AYX has corrected by 20.94% in the last three months and is trading below the average of its 52-week trading range, offering a decent opportunity for accumulation. On the technical analysis front, the stock has a support level of ~$107.95 and resistance of ~$144.62. We have valued the stock using an EV/Sales multiple based illustrative relative valuation method and have arrived at a target price of a low double-digit upside (in % terms). For the purpose, we have taken peers like Oracle Corp (NYSE: ORCL), Splunk Inc (NASDAQ: SPLK), and Datadog Inc (NASDAQ: DDOG). Considering the company’s decent performance in Q3FY20, updated guidance for FY20, and current trading levels, we give a “Buy” recommendation on the stock at the closing price of $116.5, up by 0.09% on 8 January 2021.

Pacira BioSciences, Inc.

2020 Result Highlights: Pacira BioSciences, Inc. (NASDAQ: PCRX) is a pharmaceutical company that offers non-opioid pain management and regenerative health solutions. As on 8 January 2021, the company’s market capitalization stood at ~$3.04 billion. As per the preliminary unaudited results, the company has reported net revenue of $429.6 million in 2020, up 2% on pcp. For the full year, the net product sales of EXPAREL and iovera° stood at $413.3 million and $8.8 million, respectively. During the year, the company’s sales were negatively impacted by the COVID-19 pandemic, which mandated significant postponement or suspension in the scheduling of elective surgical procedures. The complete 2020 results are expected to be released in Q1 2021.

Weekly Elective Surgeries and EXPAREL Performance (Source: Company Reports)

Outlook: Looking ahead, the company is focused on supporting the recovery of elective surgery volumes by deploying COVID-19 vaccinations. The company expects EXPAREL to play an important role in revolutionizing the practice of regional anesthesia and enables the ongoing migration of procedures to the ambulatory setting. The company recently announced that it would present at the 39th Annual J.P. Morgan Healthcare Conference on 13 January 2021.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

EV/Sales Multiple Based Relative Valuation (Source: Refinitiv, Thomson Reuters)

Note: All forecasted figures have been taken from Thomson Reuters, NTM: Next Twelve Months

Stock Recommendation: The stock has provided a return of 21.89% in the past three months. The stock recently touched its 52-weeks’ high price of $72.06. On the technical analysis front, the stock has a support level of ~$52.5 and resistance of ~$71.6. We have valued the stock using the EV/Sales multiple based illustrative relative valuation method and arrived at a target price with a correction of high single-digit (in % terms). For the purpose, we have taken peers like Pfizer Inc (NYSE: PFE), Horizon Therapeutics PLC (NASDAQ: HZNP), Endo International PLC (NASDAQ: ENDP). Considering the current trading level, decent price movement in the past three months and valuation, we suggest investors to book profit and give a sell rating on the stock at the closing price of $70.14, up 3.65% on 8 January 2021.

Mercer International Inc.

Q3FY20 Result Highlights: Mercer International Inc. (NASDAQ: MERC) is a diversified global producer of forest products, bioproducts, and green electricity. The company has operations in Germany, Canada, and Australia. As on 8 January 2021, the company’s market capitalisation stood at ~$742.99 million. For Q3FY20, the company had reported net income of $7.5 million and an operating EBITDA of $45.6 million. Over the quarter, the company was focused on maintaining measures and procedures to operate its business safely and efficiently and protect its people. The company’s Friesau sawmill witnessed a record operating income of $12.0 million in Q3FY20 despite ten days of downtime related to capital upgrades. As at 30 September 2020, the company had cash on hand and available credit facilities of $600.6 million. The company has a quarterly dividend of $0.065 per share on 30 December 2020.

Q3FY20 Results (Source: Company Reports)

Outlook: Looking ahead, the company is focused on controlling its costs, manage its working capital and conservatively manage its liquidity position. Further, the company is expecting modest price improvements due to improving global economic activity, particularly in China. In the December quarter, the company was expecting steady demand and modestly improving sales realizations in the European lumber market.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

EV/Sales Multiple Based Relative Valuation (Source: Refinitiv, Thomson Reuters)

Note: All forecasted figures have been taken from Thomson Reuters, NTM: Next Twelve Months

Stock Recommendation: Over the last three months, the stock has increased by 65.39% and is currently trading near to its 52-weeks’ high price of $13.44. On the technical analysis front, the stock has a support level of ~$9.09 and resistance of ~$12.04.  We have valued the stock using the EV/Sales multiple based illustrative relative valuation method and arrived at a target price with a correction of high-single-digit (in % terms). For the purpose, we have taken peers like Clearwater Paper Corp (NYSE: CLW), Schweitzer-Mauduit International Inc (NYSE: SWM), Neenah Inc (NYSE: NP), etc. Considering the stock’s decent return in the last three months, current trading level and valuation, we suggest investors to book profit and give a “Sell” rating on the stock at the closing price of $11.28, down by 1.66% as on 8 January 2021.

Comparative Price Chart (Source: Refinitiv, Thomson Reuters)

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