Why Cloudera Stock Gained 22.1% in January
What happened
Shares of Cloudera (NYSE: CLDR) gained 22.1% in January, according to data from S&P Global Market Intelligence. The cloud services company's stock fell roughly 35% across the last three months of 2018, but it's benefited from a stock market rebound early in 2019 and some clarification about its strategy following the merger with Hortonworks.
The company held a webcast on Jan. 10 and participated in the Needham Growth Conference on Jan. 16, using the occasions to outline its plans to combine the Cloudera and Hortonworks platforms, ramp up investment in machine learning, and maintain both companies' commitment to and focus on open-source technologies while also leaving the door open for more-restrictive software licensing if the situation calls for it.
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So what
Sell-offs for the broader market hit growth-dependent tech stocks particularly hard at the end of 2018, and a stock market rebound in January combined with new insights into the evolution of the company's data platform helped shares post a double-digit rebound.
Cloudera completed its merger with fellow Hadoop services provider Hortonworks on Jan. 1 and is moving ahead with the goal of taking on Amazon in the cloud services space. The company's support for hybrid and multicloud infrastructure means that some of its service offerings are more flexible than comparable offerings of enterprise data cloud services from Amazon. But it remains to be seen whether the new Cloudera will be able to stake out long-term success in the space.
Now what
Investors will be watching to see if the merger with Hortonworks produces the innovation momentum and operating efficiencies that the two companies outlined prior to the deal. The combination of the businesses means that the two formerly distinct components no longer have to compete against each other. Shares trade at roughly 3.7 times this year's expected sales and 128 times projected adjusted earnings.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.
