Mobileiron Will Survive the Turnaround

Mobileiron Will Survive the Turnaround

MobileIron Will Survive The Turnaround

  • MobileIron has recently announced its fiscal Q4 and full-year 2015 financial results.
  • I expectan increase in the value of the company’s shares due to three specific catalysts.
  • I expect the stock to reach a level of $6.40 per share in the near-term subject to changes in analysts’ expectations.

MobileIronhas recentlyannouncedits Q4 and full-year 2015 financial results. Despitethe downfall in the company’s market capitalization in the first three quarters of 2015,I was surprisedby the company’s financial performance. The decline in the value of the company’s shares was caused by its business model’s transition: namely,the company has switched its revenue model from a subscription-based (monthly payments) one to the pay-as-you-go model. This has greatly affected its recent quarterly results.

Nevertheless, MobileIron’s annual results for 2015 were better than a year ago:

• Non-GAAP revenue was $147.5 million, up 16% year-over-year;

• Gross billings were $165.0 million, up 13% year-over-year;

• Recurring billings, which represented 65% of gross billings, were $107.5 million, up 37% year-over-year.

• The GAAP net loss per share was $1.07; non-GAAP net loss per share was $0.71.

I believe that, through the expansion of its partnership with Google, which provides support for Android and security, which is paramount to enterprise clients, the company will be able to further enhance revenue growth. With the new security features a company`s staff will be able to store business documents and personal data securely in an enterprise cloud storage.This has enable MobileIron to launch16 new AppConnectenabled applications, as well as helped complete the SOC 2 Type II assessment for MobileIron Cloud with a 100% pass rate across 500+ tested criteria.

What can we expect?

Back in January, the company appointed Barry Mainz as its new CEO. He brings a lot of expertise into thedevelopment of the company. Immediately after commencing his duties at MobileIron, he purchased the company’s stock:

The shares were acquired at an average price of $ 3.90 per share, for a total of $199,680.00 transaction. After the purchase, CEO now owns the company's shares, worth $3,163,680.

(Source:americanbankingnews.com)

The news sent a positive signal to the market and the company’s investors.

On thetransition announcement call, Bob Tinker, the resigning CEO,characterized this as a relay race, and said:

“Given the financial, the product, and the market position of the company are stronger than ever, I felt that now is the time to bring in an executive who could lead us into the next stage of growth and scale for our business.”

(Source:Corporate website)

The new CEO is always a new challenge to a company in a highly competitive market. I think Barry Mainz will bring the company to a higher level. If youlook at what his business experience, you will see that he has already worked on a few successful projects. (Source: Yahoo Finance)

MobileIron has recently announced the launch of MobileIronAccess. This system will allow users to store data on their clouds much more securely. The system is designed to provide access control to the enterprise including cloud services such as Google Apps for field work with Office 365 and Salesforce. It blocks access to cloud services from applications and devices that are not authorized to do so and much more. At the moment,no one company does not provides the same protection data to its customers.

Below are given MobileIron Access’skey features:

  • It is designed to enable access control to enterprise cloud services including ones like Box, Google Apps for Work, Office 365, and Salesforce;
  • Blocks access to cloud services from apps and devices that are not authorized by the enterprise’s IT department;
  • It integrates with identity providers (IdP) including ADFS and PingOne
  • It provides visibility into users, apps, and devices accessing the cloud service for auditing and compliance;
  • It supports federated authentication with SAML, the dominant SSO standard.

In 2016, MobileIron'stechnologywillsolve a number of problems for the city of Stockholm:

"After reviewing the leading enterprise mobility management products on the market, and with the help of our technology partners Tieto & EVRY, we chose MobileIron to securely equip our employees with mobile access to city data and corporate apps to streamline cumbersome processes. Our new mobile strategy has transformed daily government tasks across all sectors"

(ConstantinosAmiridis, IT Strategist, City of Stockholm.)(link)

Concerning the company’s financial performance going forward, Wall Street analysts expect that MobileIron will post a loss of ($ 0.41) per share for the current fiscal year.

I believe that MobileIron’s capitalization will steadily increase this year until it reaches a level of $6.40 per share.The main catalysts for the growth are:

•The new security system, which will help drive and diversify existing revenues;

•Cooperation with the city of Stockholm which will add to the company’s brand value and provide steady cash flows;

•The expected full-year EPS of ($0.41) is quite pessimistic. Any upside surprise will likely drive the company’s share much higher. The reverse is also true;

•The new CEO is extremely fit for the job, as some recommendations on his LinkedIn profile state:

Year-to-date, the company’s shares have shown a dynamic growth for the third consecutive month. The stock has recently crossed the 200-day moving average:

(Source: StockCharts.com)

Conclusion

MobileIron has showed poor results for three consecutive quartersand has decided to get onto a turnaround paceby making a few important changes in its management and product line. I believe that Mobilelronwill survive this transition given its solid balance sheet and strong cash flow generating abilities. This year will likely be difficult for the company from a financial standpoint. However, I believe the new CEO and the strong relationships with government clients will help make the transition period smooth and successful.

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