Informatica (INFA), a data software solutions and integration provider revised its second quarter of 2012 guidance range downward for the second time this year. The firm initially guided earnings per share to $0.35-$0.37 on $210-$220 million in revenue, but it has now lowered its forecast to $0.27-$0.28 per share on $188-$190 million in revenue. The consensus called for $0.37 per share on revenue of $217 million, so this came as quite a surprise to the market.
The firm was also disappointed in its results, which it blamed on the inability to handle difficult macroeconomic conditions in Europe. Though we don’t consider Informatica the end-all-be-all of enterprise spending, we wouldn’t be surprised if these competitive pressures in Europe translate negatively for Oracle (ORCL), SAP (SAP), Verint Systems (VRNT) and Nice Systems (NICE).
Even after its dramatic fall, shares of Informatica are fairly valued, in our view. Plus, the company only registers a 4 on our Valuentum Buying Index, our stock-selection methodology. In the enterprise software space, we prefer Oracle, which is trading at the low-end of its fair value range and garners a much higher score on our Valuentum Buying Index.