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TechStock Radar
E-mail: Rob@techstockprospector.com
Technorati
February 2019
Archives
 
Friday, February 22, 2019, 11:50 AM — by Rob DeFrancesco, TechStock Radar
Morgan Stanley Upgrades Intel

Morgan Stanley upgrades Intel (INTC, $52.93) to ‘Overweight’ and raises its price target to $64 from $55, saying the shares can rerate to a higher P/E now that the company has put a “more financially oriented CEO” in charge.


The firm thinks the P/E could expand to 14 from 12 via better portfolio optimization, a new mindset of optimizing free cash flow more than earnings and a higher standard of M&A accretion. 


Intel could also undertake a much more aggressive streamlining and divesting of businesses that consume too much cash for too little return, says Morgan Stanley.

 
Friday, February 22, 2019, 11:41 AM — by Rob DeFrancesco, TechStock Radar
Piper Jaffray Lifts EA Target

Piper Jaffray raises its Electronic Arts (EA, $95.11) price target to $111 from $99, saying FY’20 should be a year where the company returns to growth due to a more favorable pipeline. 


The firm points to the successful launch of Apex Legends, and says its survey of 600+ gamers suggests a high level of purchase intent for the brand new Anthem title. 


While Piper is not calling for Anthem to be a new mega-hit franchise, the firm believes the game could become a modestly sized addition to EA’s line-up.

 
Friday, February 22, 2019, 9:10 AM — by Rob DeFrancesco, TechStock Radar
February Issue of TSP Available on Kindle

Download the new issue of Tech-Stock Prospector to your Kindle or Kindle reading app for iOS (iPad & iPhone) and Android. 


Order the latest issue of TSP here.


Here are some of the topics covered in the February 2019 issue:


*AI adoption ramps up in the enterprise

*Microsoft provides a core AI play

*Machine learning in cybersecurity

*New chips for automated driving

*Tech Focus: AI consumer use cases
*Zendesk expands its product portfolio

*Carbon Black tries for a rebound


*Facebook still delivering strong results

*Assessing the growth profile at Apple
*New Relic on track to meet revenue target
*Trend Watch: M&A heats up in HCM 

*Why Paylocity is a name to watch
*Proofpoint attracts larger customers

*Deal Report: Carbonite to acquire Webroot

 
Wednesday, February 20, 2019, 5:45 PM — by Rob DeFrancesco, TechStock Radar
EA Shares Remain Volatile

Electronic Arts (EA, $98.63) shares are taking a break from their recent rebound, but remain highly volatile. 


The stock last week surged to an intraday high of $108.80 on the early success of Apex Legends. That was a sharp recovery from the early February low of $78.


Today, EA stock dipped more than 4% on concerns about the longer-term staying power of Apex Legends as well as a new freeze on videogame approvals in China.

 
Wednesday, February 20, 2019, 1:42 PM — by Rob DeFrancesco, TechStock Radar
Chart Watch: Skyworks

Shares of Skyworks Solutions (SWKS, $83.03) have been trading sideways around current levels, sitting just below the 200-day moving average at $85.59.  


The stock has rebounded 45% from the 52-week low of $60.12 reached on January 3, hitting an intraday high of $87.48 on February 6.


The 50-day moving average is trending upward from $71.48. There’s short-term support at $79.88.

 
Tuesday, February 19, 2019, 11:42 AM — by Rob DeFrancesco, TechStock Radar
Chart Watch: Arista Networks

Arista Networks (ANET, $271.46) stock has pushed through resistance at the $269.50 level from early November after taking out the 200-day moving average at $248.89. The RSI is up to 75.9.


There’s additional resistance at $276 from September.


The 50-day moving average has just turned upward from $219.82.

 
Tuesday, February 19, 2019, 11:20 AM — by Rob DeFrancesco, TechStock Radar
Macquarie Upgrades Marvell Technology

Macquarie upgrades Marvell Technology (MRVL, $19.27) to ‘Outperform’ with a price target of $24 based on valuation and growth potential. The firm thinks estimates have likely bottomed after the recent pre-announcement. 


The storage market is positioned to recover in 2H’19 and there’s added benefits coming from the strong 5G tailwinds in 2020, says the firm. Also, Macquarie thinks Marvell should emerge as a key beneficiary from the geopolitical issues surrounding Huawei. 

 
Friday, February 15, 2019, 12:44 PM — by Rob DeFrancesco, TechStock Radar
BTIG Research Upbeat on Atlassian

BTIG Research raises its Atlassian (TEAM, $104.68) price target to $125 from $100, saying the company’s best-in-class growth opportunity and profitability framework are misunderstood by investors. The firm likes Atlassian’s ability to capitalize on its expanding TAM opportunity.


In FQ2 (Dec.), Atlassian, a provider of enterprise workflow and collaboration solutions, reported revenue growth of 39%, acceleration from +37% in FQ1.


The FY’19 (June) consensus revenue estimate of $1.2 billion represents growth of 37.1%.

 
Friday, February 15, 2019, 12:42 PM — by Rob DeFrancesco, TechStock Radar
JP Morgan Boosts Arista Target

JP Morgan raises its Arista Networks (ANET, $260.50) price target to $285 from $264 based on continued cloud momentum. The firm points to last night’s strong Q4 results and positive Q1 outlook.


Arista reported Q4 revenue grew 27% to $595.7 million, above the consensus of $591.3 million. For  Q1, the company sees revenue of $588 million to $598 million, vs. the consensus of $589.6 million.

 
Thursday, February 14, 2019, 2:28 PM — by Rob DeFrancesco, TechStock Radar
5 Top Performing Security Stocks YTD

From a pool of 21 cybersecurity names, here are the top 5 performers YTD:


1-Rapid7 ((RPD) +51%


2-ForeScout (FSCT) +46%


3-Mimecast (MIME) +46%


4-Proofpoint (PFPT) +44%


5-CyberArk (CYBR) +40%

 
Thursday, February 14, 2019, 1:04 PM — by Rob DeFrancesco, TechStock Radar
JP Morgan Downgrades Qualys

JP Morgan downgrades Qualys (QLYS, $81.45) to ‘Underweight’ and lowers its price target to $82 from $90, saying the company’s 2019 revenue guidance indicates an unanticipated growth slowdown. The firm notes that Q4 revenue growth slowed for the second straight quarter.


For 2019, Qualys looks for top-line growth of 15% to 16%, below the Street estimate calling for growth of 18.7%.


JP Morgan thinks strong guidance from Tenable (TENB, $29.04) and Rapid7 (RPD, $47.17) indicate that their product portfolios are “better aligned with the market at the moment.”


For our valuation analysis on these three companies and more details on Tenable’s growth story, see the January 2019 issue of Tech-Stock Prospector (TSP #203).

 
Wednesday, February 13, 2019, 10:47 AM — by Rob DeFrancesco, TechStock Radar
2 Bulls on Shopify

RBC Capital upgrades Shopify (SHOP, $174.35) to ‘Outperform’ and lifts its price target to $230 from $180 based on growth prospects in international markets. 


Canaccord takes its target up to $190 from $165, saying it thinks the company is capable of scaling to revenue of $5 billion+ over the next five to six years. The firm likes the investments planned for this year in international markets.


In Q4, Shopify’s revenue rose 54% to $343.9 million, easily beating the consensus estimate of $327.6 million. 


For more on Shopify, see the January 2019 issue of Tech-Stock Prospector (TSP #203).

 
Wednesday, February 13, 2019, 10:32 AM — by Rob DeFrancesco, TechStock Radar
Chart Watch: Akamai

Shares of Akamai Technologies (AKAM, $70.54) have rallied back to their 200-day moving average at $71.18 following last night’s Q4 report, which was above expectations on both the top and bottom lines. 


Revenue rose 8% to $713.3 million, driven by Cloud Security revenue (26% of total revenue) advancing 36%.


There’s resistance at $74 from late October.

 
Monday, February 11, 2019, 1:31 PM — by Rob DeFrancesco, TechStock Radar
RingCentral Boosts Customer Engagement

On the RingCentral (RNG, $101.40) Q4 earnings call today after the close, investors will want to hear more about the company’s recently announced acquisition of Connect First, a cloud-based outbound/blended customer engagement platform for midsize and enterprise companies.


Connect First adds to the RingCentral Customer Engagement product portfolio, which already includes Contact Center (for inbound communications and workforce optimization) and Engage (for digital customer engagement).


JP Morgan thinks the Connect First acquisition is directly targeted at improving RingCentral’s competitive position against Five9 (FIVN, $52.48). The firm says Five9’s integration of both inbound and outbound capabilities in one platform is frequently noted as a competitive advantage by customers. 


The Connect First deal improves RingCentral’s offering for customers needing strong outbound dialing capabilities, says JP Morgan.

 
Monday, February 11, 2019, 9:38 AM — by Rob DeFrancesco, TechStock Radar
Wedbush Lifts Shopify Target to $200

Wedbush raises its Shopify (SHOP, $178.53) price target to $200 from $177 based on upside potential to Q4 revenue, driven by conservative GMV estimates and Shopify Plus variable revenue.


The firm views Shopify as well positioned to capture share of both overall e-commerce wallet and enterprise commerce. 


Wedbush thinks investors underestimate the potential of Shopify Plus. The firm sees the scalability of merchants on Shopify as an important trend, and believes it will lead to Plus market share gains in both the mid-market and smaller enterprise segments.

 
Friday, February 8, 2019, 4:06 PM — by Rob DeFrancesco, TechStock Radar
Barclays Downgrades Anaplan

Barclays downgrades Anaplan (PLAN, $31.78) to ‘Equal Weight’ with a price target of $32 (up from $30) based on valuation.


The firm likes Anaplan’s market positioning in cloud-based planning for large enterprises, but says the stock is already trading above 10x estimated CY’20 revenue.


Anaplan went public last October at $17 a share, with an opening trade at $24.25.

 
Friday, February 8, 2019, 3:47 PM — by Rob DeFrancesco, TechStock Radar
EA Shares Pop 15%

Shares of Electronic Arts (EA, $96.76) are rebounding 15% today on word that the company’s new free-to-play ‘Apex Legends’ battle-royale game reached more than 10 million active players in its first 72 hours, with 1 million+ concurrent players.


Baird thinks the early engagement numbers are impressive, and could lead to upside for the stock if user growth and monetization trends can maintain the game’s early momentum. For now, the firm maintains its EA price target of $90.


On Tuesday, EA shares fell to a low of $78 on disappointing earnings and guidance.

 
Thursday, February 7, 2019, 4:35 PM — by Rob DeFrancesco, TechStock Radar
Chart Watch: Zscaler

At Tuesday’s high of $49.95 (a new post-IPO high), shares of Zscaler (ZS, $48.03), a provider of cloud-based security services, had rebounded 62.5% from the November low of $30.72. 


The stock is now well above its 50-day moving average, which is trending upward from $42.14.


Zscaler went public last March at $16 a share, with an opening trade at $27.50. The company reports FQ2 (Jan.) results on February 28.

 
Thursday, February 7, 2019, 10:18 AM — by Rob DeFrancesco, TechStock Radar
Goldman Downgrades Elastic After Run-Up

Goldman Sachs raises its Elastic (ESTC, $83.07) price target to $90 from $78, but downgrades the stock to ‘Neutral’ based on valuation following the recent sharp rally.


From the December 24 low of $60.78, Elastic shares jumped 51.5%, hitting a new post-IPO high of $92.10 on Monday.


Goldman believes Elastic, an enterprise-search provider, continues to have strong fundamentals and a solid long-term opportunity. 


For more on Elastic, see the December 2018 issue of Tech-Stock Prospector (TSP #202).

 
Wednesday, February 6, 2019, 4:40 PM — by Rob DeFrancesco, TechStock Radar
Paycom Jumps 7% on Strong Outlook

Paycom (PAYC, $169.14) shares today finished with a gain of 7.7% after the company last night delivered strong Q4 results, with revenue rising 32% to $150.3 million, vs. the consensus estimate of $144.1 million.


Paycom’s Q1 top-line guidance range of $194 million to $196 million came in above the consensus of $190.9 million.


KeyBanc raises its PAYC price target to $182 from $133 based on strong execution, improving margins and a 25%+ growth outlook.


For 2019, Paycom, a provider of cloud-based HCM solutions, looks for revenue of $710 million to $712 million, representing growth of 25.5% at the midpoint. In 2018, revenue rose 31% to $566.3 million.


Jefferies lifts its target to $180 from $139, saying the stock is not cheap, but the company is well-managed and should be able to show sustained, material growth and profits for years.


Paycom shares today hit a new all-time high at $179.22.

 
Wednesday, February 6, 2019, 10:45 AM — by Rob DeFrancesco, TechStock Radar
Zendesk Hits New All-Time High

KeyBanc raises its Zendesk (ZEN, $74.55) price target to $92 from $71, pointing out that the company last night reported its highest revenue growth in two years. Q4 revenue advanced 41%, acceleration from +38% in Q3.


The firm believes Zendesk, provider of a cloud-based customer service platform, has a growth outlook that could justify further multiple expansion, as the company’s product portfolio and enterprise traction build through 2019.


Zendesk shares this morning are up more than 8%. Earlier, the stock hit a new all-time high at $78.78.


Zendesk is a long-term holding in the Tech-Stock Prospector Small-Cap Portfolio, added in March 2015, when the stock was trading at $22.76.

 
Tuesday, February 5, 2019, 3:58 PM — by Rob DeFrancesco, TechStock Radar
Chart Watch: Facebook

Sporting an RSI of 73.6, shares of Facebook (FB, $171.01) are trading back above the 200-day moving average of $166.94. 


The next key resistance levels to watch: $171.77 from September and $179.79 from August.


Facebook stock has rebounded 39% from the December low of $123.02. The 50-day moving average is now trending upward from $142.40. 

 
Tuesday, February 5, 2019, 10:34 AM — by Rob DeFrancesco, TechStock Radar
UBS Remains Bullish on Alphabet

UBS remains positive on Alphabet (GOOGL, $1,132) following the release of Q4 results. The company produced solid revenue growth of 21.5% against fears of a slowdown and macro impact to digital advertising, says the firm.


While operating income margin volatility might detract from the revenue story, UBS thinks investors have a better understanding of the need for continued investment. Signals of moderating headcount and CapEx should point to relief from recent volatility, says the firm.


UBS ups its GOOGL price target to $1,420 from $1,400.

 
Monday, February 4, 2019, 12:29 PM — by Rob DeFrancesco, TechStock Radar
Paylocity & Paycom Rally on Ultimate News

Shares of Paylocity (PCTY, $76.99) and Paycom (PAYC, $155.12), two cloud-based HCM software providers, are rising today in sympathy with Ultimate Software (ULTI, $332), which is going private in an $11-billion deal. 


Paylocity is up 5.3%, while Paycom is gaining 2.8%.


The Ultimate deal is going out at about 8 times forward revenue. 


With a market cap of $4.06 billion, Paylocity now trades at 8.9 times the FY’19 (June) consensus revenue estimate of $454.8 million (representing growth of 20.5%). In FY’18, Paylocity’s revenue was up 26%.


Paycom is a larger player, sporting a market cap of $9.09 billion. That’s 13x the 2019 consensus revenue estimate of $695.9 million (growth of 24.4%). Analysts expect 2018 growth to have come in at 29.2%.

 
Monday, February 4, 2019, 9:24 AM — by Rob DeFrancesco, TechStock Radar
Deal Alert: Ultimate Software Going Private

Ultimate Software (ULTI, $277.83), a provider of cloud-based human capital management (HCM) solutions, will be taken private by an investor group led by Hellman & Friedman at $331.50 a share in cash in a deal worth roughly $11 billion.


The transaction price represents a 32% premium to Ultimate’s average price over the past 30 trading days, and a 19% premium to Friday’s close.


There’s a 50-day “go-shop” period. The deal is expected to close in mid-2019.


For 2019, analysts on average expect Ultimate revenue to reach $1.36 billion, representing growth of 19.9%.

 
Friday, February 1, 2019, 1:25 PM — by Rob DeFrancesco, TechStock Radar
Earnings Mover: Proofpoint Pops 12%

Solid Q4 results last night from cybersecurity solutions vendor Proofpoint (PFPT, $114.61) have sparked a 12.5% rally today in the stock. 


Proofpoint is a long-term security holding in the Tech-Stock Prospector Small-Cap Portfolio, added in September 2013, when the stock was trading at $27.91. Today’s intraday high was $117.28. 


In Q4, Proofpoint’s revenue of $198.5 million rose 35% and topped the consensus estimate by 3.1%, while per-share earnings of 51 cents came in 16 cents above the consensus.

 
Friday, February 1, 2019, 9:33 AM — by Rob DeFrancesco, TechStock Radar
Goldman Sets ServiceNow PT at $260

Goldman Sachs resumes coverage of ServiceNow (NOW, $218.38) at ‘Buy’ with a price target of $260 based on a combination of growth potential and valuation.


The firm thinks ServiceNow’s strategic shift into more of a workflow management platform will facilitate expansion into a number of new products.

   
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