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Key Reasons to Add Model N (MODN) Stock to Your Portfolio

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With stellar first-quarter fiscal 2018 results, acquisition synergies, Software-as-a-Service (SaaS) based model and strong fundamentals; Model N, Inc. (MODN) appears a promising pick right now. Moreover, it has been a favorite with investors, courtesy of its rising share price.

 

Model N’s shares returned 74.3% year over year, substantially outperforming the 30.9% rally of the industry.

 

Notably, the company has a number of other aspects that make it an attractive investment option.

 

Reasons Why Model N an Attractive Pick

 

Upbeat Q1 Results: The company reported first-quarter fiscal 2018 earnings of 3 cents per share versus the year-ago quarter’s loss of 15 cents per share. The Zacks Consensus Estimate was pegged at a loss of 6 cents per share.

 

Revenues of $39.1 million increased 39% year over year and beat the Zacks Consensus Estimate of $37 million. The figure also surpassed the guided range of $37 million to $37.5 million.

 

Management noted that successful integration of Revitas was a major driving force and it helped the company deliver greater value to the investors. It has also made steady progress in its transformation to a 100% Software-as-a-Service (SaaS) based model.

 

Encouraging Revenue Guidance: Model N expects fiscal second-quarter 2018 GAAP revenues between $38 million and $38.5 million. The Zacks Consensus Estimate is pegged at $36.67 million.

 

Positive Earnings Surprise History: Model N has an impressive earnings surprise history. It outpaced the Zacks Consensus Estimate in the trailing four quarters, recording a positive average earnings surprise of 53.24%.

 

Key Catalysts - The integration of Revitas was completed successfully during fiscal 2017. The Revitas acquisition has expanded Model N’s product suite and customer base. Revitas contributed approximately $3.6 million to SaaS and Maintenance revenues as well as approximately $1.6 million to the company’s license and implementation revenues.

 

To aid growth, the company unveiled the Revenue Cloud platform, which will enable companies in manufacturing industries, technology and life science industries to carry out a digital transformation.

 

The company’s Revenue Cloud offerings for med-tech, pharma and high tech companies remain positive. It also added Nexperia, a semiconductor manufacturer, to its client base. The company will use Revenue Cloud to manage direct and channel revenues.

 

Model N’s growth prospects in life sciences & high technology are bright, owing to increasing ineffectiveness of legacy systems. Its solutions provide higher Return on Investment (“ROI”) as well as plug gaps in the end-to-end revenue management process that legacy systems fail to do. This improves top-line growth of the companies, consequently bolstering adoption of Model N’s solutions.

 

Additionally, Seagate Technology PLC (STX), a prominent data storage provider, rolled out the Phase 1 Revenue Cloud for high tech. This bodes well for Model N. Recently, the company also inked several deals with high-tech and life science companies including DexCom, Seagate, Intel and Amgen.

 

Zacks Rank and Stocks to Consider

 

Model N carries a Zacks Rank #2 (Buy).

 

A few other better-ranked stocks in the technology sector are Facebook, Inc. (FB) and NVIDIA Corporation (NVDA), both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

 

Facebook and NVIDIA have long-term expected earnings growth rate of 26.18% and 10.25%, respectively.

 

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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

 

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With stellar first-quarter fiscal 2018 results, acquisition synergies, Software-as-a-Service (SaaS) based model and strong fundamentals; Model N, Inc. MODN appears a promising pick right now. Moreover, it has been a favorite with investors, courtesy of its rising share price.

Model N’s shares returned 74.3% year over year, substantially outperforming the 30.9% rally of the industry.

Notably, the company has a number of other aspects that make it an attractive investment option.

Reasons Why Model N an Attractive Pick

Upbeat Q1 Results: The company reported first-quarter fiscal 2018 earnings of 3 cents per share versus the year-ago quarter’s loss of 15 cents per share. The Zacks Consensus Estimate was pegged at a loss of 6 cents per share.

Revenues of $39.1 million increased 39% year over year and beat the Zacks Consensus Estimate of $37 million. The figure also surpassed the guided range of $37 million to $37.5 million.

Management noted that successful integration of Revitas was a major driving force and it helped the company deliver greater value to the investors. It has also made steady progress in its transformation to a 100% Software-as-a-Service (SaaS) based model.

Encouraging Revenue Guidance: Model N expects fiscal second-quarter 2018 GAAP revenues between $38 million and $38.5 million. The Zacks Consensus Estimate is pegged at $36.67 million.

Positive Earnings Surprise History: Model N has an impressive earnings surprise history. It outpaced the Zacks Consensus Estimate in the trailing four quarters, recording a positive average earnings surprise of 53.24%.

Key Catalysts- The integration of Revitas was completed successfully during fiscal 2017. The Revitas acquisition has expanded Model N’s product suite and customer base. Revitas contributed approximately $3.6 million to SaaS and Maintenance revenues as well as approximately $1.6 million to the company’s license and implementation revenues.

To aid growth, the company unveiled the Revenue Cloud platform, which will enable companies in manufacturing industries, technology and life science industries to carry out a digital transformation.

The company’s Revenue Cloud offerings for med-tech, pharma and high tech companies remain positive. It also added Nexperia, a semiconductor manufacturer, to its client base. The company will use Revenue Cloud to manage direct and channel revenues.

Model N’s growth prospects in life sciences & high technology are bright, owing to increasing ineffectiveness of legacy systems. Its solutions provide higher Return on Investment (“ROI”) as well as plug gaps in the end-to-end revenue management process that legacy systems fail to do. This improves top-line growth of the companies, consequently bolstering adoption of Model N’s solutions.

Additionally, Seagate Technology PLC STX, a prominent data storage provider, rolled out the Phase 1 Revenue Cloud for high tech. This bodes well for Model N. Recently, the company also inked several deals with high-tech and life science companies including DexCom, Seagate, Intel and Amgen.

Zacks Rank and Stocks to Consider

Model Ncarries a Zacks Rank #2 (Buy).

A few other better-ranked stocks in the technology sector are Facebook, Inc. FB and NVIDIA Corp. NVDA, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Facebook and NVIDIA have long-term expected earnings growth rate of 26.18% and 10.25%, respectively.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>


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