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On 15th January AIM listed super IPO of 2012 WANdisco (LSE:WAND) served up what was a very upbeat and impressive trading statement prompting modest upgrades from its paid for research lackeys at Edison and GE&CR and sending the shares soaring ahead to a 577.5p share price. The 2014 PE ratio is now in the region of 120. On 6th January I explained why this stock was actually, a plausibly, cheap share tip at 493p although it could hardly be described as a traditional Warren Buffett style value investment.
You can read that hot share tip with detailed forecasts out to 2015 here
The statement from WANdisco noted that fourth quarter subscription bookings were $2.53m (marginally ahead of forecast) which represented a 76% year on year increase and a 25% quarter on quarter increase. Full year bookings came in at $7.92m up 71% year-on-year. The annualised renewal rate by booking was 140% meaning that existing customers just spent more and more with WANdisco. New customer wins in the quarter included Apple, Fujitsu and Cap Gemini. Looking forward we are led to expect three big product launches in Q1 calendar 2013.
Is anyone changing forecasts? At this stage no. That means that WANdisco will report a 2013 loss. Earnings per share ( Panmure estimate) should come in at 4.8p in 2014 and by 2015 (my estimate as none of the analysts not even of the paid for lackey variety can be bothered) earnings could hit 15p. With a very high cross margin and this rate of revenue growth 2016 could see 25p plus.
Of course in technology things can move fast. And that is the danger of forecasting out too far ahead. But the potential earnings growth is why the shares continue to move ahead.
To read my detailed ( and clearly prescient) note of 6th Jan click HERE
Tom Winnifrith writes for 10 US and UK websites and his work is collated at www.TomWinnifrith.com
Follow Tom on twitter @tomwinnifrith for links to all his articles and the latest hot stockmarket rumours
Tom is also an innovative chef and owns a quirky Celtic Italian restaurant in London’s Clerkenwell which today launches its latest utterly unique dish Spaghetti all Chocolata
