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TechStock Radar
E-mail: Rob@techstockprospector.com
Technorati
January 2018
Archives
 
Monday, January 22, 2018, 10:55 AM — by Rob DeFrancesco, TechStock Radar
Chart Watch: Tableau

Shares of Tableau Software (DATA, $74.34) are holding above the 50-day moving average of $71. There’s short-term support at $72.43, with resistance at $75.67.

The 200-day moving average is trending upward from $67.82.

 
Monday, January 22, 2018, 9:33 AM — by Rob DeFrancesco, TechStock Radar
Goldman Downgrades Palo Alto Networks

Goldman Sachs downgrades Palo Alto Networks (PANW, $153.53) to ‘Neutral’ and trims its price target to $168 from $171, saying the stock’s risk/reward profile is balanced at current levels.

Last week, Palo Alto shares hit a new 52-week high at $158.78.

 
Monday, January 22, 2018, 9:24 AM — by Rob DeFrancesco, TechStock Radar
January 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 January 2018 issue:


*The Cloud Megatrend remains in force
*ServiceNow seeing upside momentum

*Workday primed for success in financials
*F5 Networks benefiting from the public cloud
*Tech Focus: Training neural networks
*Assessing growth opportunities at NVIDIA
*Cornerstone welcomes a major new investor
*Apple iPhone ASPs could get a lift

*Encouraging metrics at Twilio

*Pipeline expansion at MuleSoft

*Akamai attracts an activist investor

*Intel deals with chip vulnerabilities

*Coupa Software set for market share gains

*Mimecast is a vendor to watch in security
*A positive development at Imperva

*Why some smart investors like Rapid7

*Ambarella sees potential in computer vision
*Trend Watch: Identity as a Service

*Okta faces new competitive threats

*FireEye shows signs of improvement
 
Friday, January 19, 2018, 10:11 AM — by Rob DeFrancesco, TechStock Radar
Atlassian Dips on FQ2 Results

Atlassian (TEAM, $52.86), a provider of team collaboration and productivity solutions, last night reported that fiscal Q2 (Dec.) revenue growth accelerated to 43% from +42% in FQ1 and +37% in FQ4.


Subscription revenue (representing the cloud business) jumped 70%, acceleration from +69% in FQ1 and +66% in FQ4.


The company in FQ2 added a record 4,825 net new customers. The paid customer count now totals 112,571.


Even with those strong numbers, Atlassian shares this morning are down nearly 5% because of valuation and some concerns about FQ3 operating margin pressure.

 
Friday, January 19, 2018, 9:45 AM — by Rob DeFrancesco, TechStock Radar
Credit Suisse Boosts Microsoft Target

Credit Suisse raises its Microsoft (MSFT, $90.57) price target to $115 from $95 based on strong momentum in the company’s commercial cloud business. The firm looks for continued gains in 2018, as Azure remains a preferred cloud solution (along with Amazon’s AWS) across the enterprise.

 
Thursday, January 18, 2018, 9:23 AM — by Rob DeFrancesco, TechStock Radar
PayPal Positioned for Payments Growth

Jefferies boosts its PayPal (PYPL, $82.47) price target to $95 from $86, citing data points that suggest modest upside to Q4 estimates. The firm expects PayPal’s positive momentum to continue into 2018 thanks to the ongoing ramp of online/mobile/social payments.


BofA/Merrill also sees potential upside for Q4 based on PayPal management’s conservatism, ongoing cost controls at the company and strong U.S. e-commerce spending data. The firm maintains its price target of $88.


Yesterday, Credit Suisse took its PayPal target up to $91 from $85, saying the company offers the broadest exposure to the fastest growth trends in the payments industry—including online commerce, P2P and social payments.


For more on PayPal, see TechStock Radar—January 8, 2018.

 
Thursday, January 18, 2018, 9:09 AM — by Rob DeFrancesco, TechStock Radar
Bernstein Bullish on Electronic Arts

Bernstein starts Electronic Arts (EA, $113.14) at ‘Outperform’ with a price target of $139 based on valuation and the company’s ability to deliver dependable growth. 


The firm believes the shares are temporarily relatively depressed due to the recent microtransactions “drama” associated with the Star Wars game.


For more on EA, see TechStock Radar—January 8, 2018.

 
Wednesday, January 17, 2018, 9:20 AM — by Rob DeFrancesco, TechStock Radar
RBC Capital Lifts VMware Target to $150


RBC Capital raises its VMware (VMW, $132.14) price target to $150 from $137, saying it’s feeling more comfortable about its positive view on the company’s hybrid and cross-cloud drivers.


The firm believes VMware is an under-owned name in the large-cap software space that offers several drivers and a reasonable FCF valuation. 


VMware shares yesterday hit a new all-time high at $134.45.

 
Wednesday, January 17, 2018, 9:03 AM — by Rob DeFrancesco, TechStock Radar
Microsoft Azure Gains Momentum

KeyBanc says Microsoft (MSFT, $88.35) in Q4 gained momentum in the public cloud, with Azure reaching a 20% market share, up from 16% in the year-ago period. 


Meanwhile, the market share for Amazon’s AWS fell to 62% from 68%, while Google Cloud Platform went to 12% from 10%.


For FY’18 (June), KeyBanc expects revenue growth of 88% for Azure. The firm raises its MSFT price target to $106 from $94.


Microsoft shares yesterday hit a new all-time high at $90.79.

 
Tuesday, January 16, 2018, 10:17 AM — by Rob DeFrancesco, TechStock Radar
Piper Jaffray Lifts Ultimate PT to $250

Piper Jaffray ups its Ultimate Software (ULTI, $226.78) price target to $250 from $225, saying its partner checks for Q4 suggest a solid bookings quarter, with strength in both the mid-market and enterprise segments.


For 2018, the consensus revenue estimate of $1.11 billion represents growth of 19.1%.

 
Tuesday, January 16, 2018, 9:20 AM — by Rob DeFrancesco, TechStock Radar
BMO Capital & OpCo Bullish on Amazon

BMO Capital raises its Amazon (AMZN, $1,305) price target to $1,600 from $1,200 based on estimates that direct response advertising will produce about $18 billion of revenue over the medium term.


OpCo names Amazon its Top 2018 Large-Cap Pick and raises its target to $1,450 from $1,330. The firm believes Amazon is best positioned among its large-cap universe to benefit from secular trends further supported by an improving global macro backdrop.


OpCo says the advertising business is emerging as an incremental driver of the stock for 2018.

 
Friday, January 12, 2018, 11:37 AM — by Rob DeFrancesco, TechStock Radar
Zendesk Hits New All-Time High

Shares of Zendesk (ZEN, $37.14) this morning hit a new all-time high at $37.19. So far this year, the stock has advanced 9.7%. That’s on top of last year’s hefty gain of 59.6%.

Zendesk, a provider of cloud-based customer support solutions, is a a long-term holding in the Tech-Stock Prospector Small-Cap Portfolio, added in March 2015, when the stock was trading at $22.76.

 
Friday, January 12, 2018, 10:52 AM — by Rob DeFrancesco, TechStock Radar
Needham Sets Cloudera PT at $22

Needham starts Cloudera (CLDR, $18.18) at ‘Buy’ with a price target of $22 based on the company’s strong growth prospects.

Cloudera addresses customer demands by layering proprietary software for data governance, data management and support tools on top of open-source distribution that enables large-scale data storage and analytics, says the firm.

With Cloudera’s platform, users are able to gain better insights into their customers, connect products/services in the IoT world, predict real-time maintenance/service needs and manage risk against cyber fraud.

For more on Cloudera, see TechStock Radar—January 11, 2018.

 
Friday, January 12, 2018, 10:07 AM — by Rob DeFrancesco, TechStock Radar
Stifel Downgrades Facebook

Facebook (FB, $180.33) gets a downgrade to ‘Hold’ at Stifel after the company said it would make changes to the News Feed to increase positive social interaction on the platform.

As part of the plan, Facebook will deemphasize posts, photos and video from businesses, brands and the media. Instead, posts that are shared and discussed by users will be favored. The move is expected to impact engagement metrics and user time spent on the platform.

Stifel says there is too much uncertainty related to the economic impact of Facebook’s pending News Feed changes for it to be comfortable retaining a positive rating on the stock.

 
Thursday, January 11, 2018, 10:52 AM — by Rob DeFrancesco, TechStock Radar
KeyBanc Ups Nutanix PT to $42

KeyBanc raises its Nutanix (NTNX, $37.41) price target to $42 from $37 because it has increased confidence in longer-term ASP expansion at Global 2000 customers.

As of FQ1 (Oct.), Nutanix had 608 Global 2000 customers, up 40% from the year-ago level. The lifetime purchase multiple for the company’s Global 2K customers (after 18 months) is 8.6x, vs. 4.1x for all customers.

For more on Nutanix, see TechStock Radar—January 10, 2018.
 
Thursday, January 11, 2018, 10:44 AM — by Rob DeFrancesco, TechStock Radar
Citi & Mizuho Like Cloudera

Shares of Cloudera (CLDR, $18.10) jumped more than 6% yesterday on two Wall Street upgrades. The infrastructure software company provides a platform for data management, machine learning and advanced analytics.

Mizuho went to ‘Buy’ with a price target of $21, saying it remains positive based on adoption trends and the penetration opportunity as use cases for Hadoop expand over time. The firm believes the stock could rerate as management builds more credibility with investors.

Citi raised its rating to ‘Buy’ and lifted its price target to $24 from $18. The firm likes the set-up going into FY’19 (Jan.) because it believes concerns about profitability and the company’s market positioning are overdone.

In FQ3 (Oct.), Cloudera’s revenue of $94.6 million rose 41%, acceleration from 39% growth in the previous quarter. For FY’18, the company expects subscription revenue growth of 48% to 49%.

Cloudera went public last April at $15. The shares hit a post-IPO high in May at $23.35, then fell to a new low of $14.50 in October.

 
Thursday, January 11, 2018, 9:23 AM — by Rob DeFrancesco, TechStock Radar
JP Morgan & Stifel Bullish on Amazon

JP Morgan names Amazon (AMZN, $1,254) a Top Pick for 2018. The firm’s price target is $1,385. With e-commerce and the cloud secular shift still in the early growth stages, JP Morgan sees a strong long-term outlook.

The firm says Amazon is investing in more major growth opportunities than any other company it follows.

Stifel lifts its Amazon target to $1,425 from $1,313, saying it expects strong Q4 results highlighted by healthy e-commerce sales, continued momentum in Prime membership adoption and continued strength in AWS.

Stifel raises its long-term estimates to reflect ongoing momentum in e-commerce sales, supported by a healthy consumer backdrop and continued traditional retail dislocation.

For more on Amazon, see TechStock Radar—January 10, 2018.

 
Wednesday, January 10, 2018, 9:50 AM — by Rob DeFrancesco, TechStock Radar
OpCo: Nutanix a Top Pick for 2018

OpCo names Nutanix (NTNX, $37.10) one of its Top Picks for 2018 based on the view that investors still under-appreciate the company’s shift to a software model. The firm’s price target is $43.

Nutanix is the leading hyperconverged infrastructure (HCI) vendor, with only VMware (VMW) as a strongly positioned alternative, says the firm.

OpCo thinks the move to a software-only model means Nutanix can highlight platform breadth; drive faster adoption of its products; and catalyze an eventual shift to more services and subscription offerings.

Product breadth could make for a faster than expected software transition, bringing with it a quick reset to the hardware top-line adjustment and faster than expected gross margin improvement, says the firm.

In the July 2017 issue of Tech-Stock Prospector (TSP #185), we pointed out Nutanix’s modest valuation, when the stock was trading at $19.12. Yesterday, Nutanix hit a new 52-week high at $38.80.

For more on Nutanix, see TechStock Radar—Dec. 1, 2017.

 
Wednesday, January 10, 2018, 9:37 AM — by Rob DeFrancesco, TechStock Radar
Akamai Exploring Strategic Options

JP Morgan lifts its Akamai Technologies (AKAM, $67.63) price target to $75 from $58 following a Bloomberg report yesterday about the company hiring Morgan Stanley to explore strategic alternatives.

In light of the recent activist investor filing from Elliott, JP Morgan explored—in three separate scenarios (standalone, LBO or strategic acquisition)—where value can be created at Akamai.

The three alternatives suggest a stock price between $80 and $84 by the end of 2018 (or at the time of any transaction), says the firm.

JP Morgan believes standalone improvement or a leveraged buyout may make the most sense.

 
Wednesday, January 10, 2018, 9:21 AM — by Rob DeFrancesco, TechStock Radar
Piper: Amazon Has Market Share Upside

Piper Jaffray raises its Amazon (AMZN, $1,252) price target to $1,400 from $1,200 based on a recent survey showing the company still has a large opportunity to gain U.S. wallet share.

A survey of 1,000 U.S. Internet users found that most respondents use Amazon far more sparingly than many would expect, says the firm. In fact, half of respondents allocated only 0% to 10% of their 2017 holiday spend to Amazon.

The firm estimates Amazon had only a 4% share of the total 2017 holiday shopping dollars spent in the U.S.

Piper contends that Amazon, despite it size and continued strong growth, is arguably “still in the early innings of its share gain potential.”

 
Tuesday, January 9, 2018, 9:39 AM — by Rob DeFrancesco, TechStock Radar
OpCo Lifts Microsoft PT to $115

OpCo lifts its Microsoft (MSFT, $88.13) price target to $115 from $100 based on the argument that the company is best positioned for enterprise hybrid cloud growth.

Regarding plans for repatriated cash, the firm sees a split between shareholders and acquisitions.

 
Tuesday, January 9, 2018, 9:27 AM — by Rob DeFrancesco, TechStock Radar
Cowen Upgrades PayPal

Cowen upgrades PayPal (PYPL, $79.05) to ‘Outperform’ with a price target of $88 (up from $67), calling the company’s growth trajectory among the most compelling in the payments space.

The firm thinks recent worries (about margin compression, eBay renewal and a take-rate collapse) will not play out.

 For 2018, the consensus revenue estimate of $15.38 billion represents growth of 18.5%, while the per-share earnings consensus of $2.26 indicates growth of 20.8% (on top of 24.6% growth expected for 2017).

 
Monday, January 8, 2018, 10:18 AM — by Rob DeFrancesco, TechStock Radar
JP Morgan: Facebook a 2018 Best Idea

JP Morgan names Facebook (FB, $188.34) a Best Idea for 2018. The firm raises its price target to $230 from $225.

JP Morgan says Facebook continues to show a rare and impressive combination of scale, growth and profitability. The firm expects continued strong engagement, and highlights the rapid growth at Instagram, which it believes could double over time and ultimately approach core Facebook platform scale.

 
Monday, January 8, 2018, 10:11 AM — by Rob DeFrancesco, TechStock Radar
BMO Capital Upgrades Electronic Arts

BMO Capital upgrades Electronic Arts (EA, $112.99) to ‘Outperform’ and lifts its price target to $130 from $97.

The firm believes the decline in the stock price caused by consumer pushback on in-game monetization of the Star Wars title was overdone, saying the company has a solid long-term story with a stable sports portfolio and a sensible eSports strategy.

For FY’19 (March), BMO Capital raises its EPS estimate to $5.20 from $4.80 (the consensus is $4.97) based on higher margins from the continued transition to digital downloads from physical software sales.

 
Friday, January 5, 2018, 10:55 AM — by Rob DeFrancesco, TechStock Radar
BMO Capital Bullish on Mimecast

BMO Capital starts coverage of Mimecast (MIME, $30.44), a provider of cloud-based email security solutions, at ‘Outperform’ with a price target of $35, saying it likes the company’s consistent growth and SaaS-based model.

The firm looks for Mimecast over the next two years to generate mid-to-high 20% revenue growth accompanied by higher operating & FCF margins.

For fiscal 2019 (March), the consensus revenue estimate of $310.2 million indicates growth of 22.3%.

We profiled Mimecast in the September 2016 issue of Tech-Stock Prospector (TSP #175), when the stock traded at $17.15.

For more on Mimecast, see TechStock Radar—November 10 & December 19, 2017.

 
Friday, January 5, 2018, 9:51 AM — by Rob DeFrancesco, TechStock Radar
Citi Ups Amazon Price Target to $1,400

Citi raises its Amazon (AMZN, $1,213) price target to $1,400 from $1,250 and names the stock its top pick for 2018 in the consumer Internet sector.

The firm calls the combination of 30%+ sales growth, margin expansion and the current valuation as a “compelling mix” for Amazon.

Amazon shares this morning hit a new all-time high at $1,217.68.

 
Friday, January 5, 2018, 9:41 AM — by Rob DeFrancesco, TechStock Radar
BofA/Merrill Upgrades Cisco

BofA/Merrill upgrades Cisco Systems (CSCO, $39.49) to ‘Buy’ and raises its price target to $46 from $37 based on its view that the company is in the early stages of a positive transition to software.

Following years of SDN and public cloud uncertainty, the firm says it’s now incrementally more positive on Cisco’s stability.

Cisco shares this morning hit a new multi-year high at $39.88.

 
Thursday, January 4, 2018, 9:47 AM — by Rob DeFrancesco, TechStock Radar
Increased Competition for CyberArk

Deutsche Bank has become a bit more cautious on CyberArk Software (CYBR, $41.33), saying it sees the bulk of the market growth in privileged account security (PAS) going forward being driven by mid-market companies that are more price sensitive than larger enterprises.

The firm also calls out rising competition in this segment of security software, with CyberArk increasingly going up against smaller vendors with cheaper solutions.

Deutsche Bank maintains its CYBR price target of $47.

 
Thursday, January 4, 2018, 9:38 AM — by Rob DeFrancesco, TechStock Radar
Cowen Downgrades Snap

Cowen downgrades Snap (SNAP, $14.96) to ‘Underperform’ with a price target of $11 after reducing estimates for the 2018-2022 period.

The firm says results of its recent ad buyer survey were mixed for Snap, indicating only modest share gains in social/video budgets expected for 2018/2019.

 
Wednesday, January 3, 2018, 10:18 AM — by Rob DeFrancesco, TechStock Radar
OpCo Upgrades Ambarella

OpCo upgrades Ambarella (AMBA, $64.70) to ‘Outperform’ with a price target of $70, saying it expects the investor conversation to shift toward a thesis based on the market potential for computer vision and the company’s CV1 chip.

The firm believes Ambarella’s core business is sustainable, with downward revisions coming to and end.

We profiled Ambarella, focusing on the CV1 chip, in the October 2017 issue of Tech-Stock Prospector (TSP #188). At the time, Ambarella shares were trading around $49.75.

Ambarella shares, up 3.8% this morning, are nearing the 52-week high of $65.39 reached last May.

 
Wednesday, January 3, 2018, 9:38 AM — by Rob DeFrancesco, TechStock Radar
Cowen Remains Bullish on Amazon

Cowen reiterates its Amazon (AMZN, $1,194) price target of $1,500, calling out Prime as the most critical driver for the company e-commerce business over the long term.

The firm notes that Amazon ended 2017 with roughly 60 million Prime households, and that subscriber growth is accelerating.

 
Wednesday, January 3, 2018, 9:28 AM — by Rob DeFrancesco, TechStock Radar
Morgan Stanley Upgrades Oracle

Morgan Stanley upgrades Oracle (ORCL, $46.63) to “Overweight’ with a price target of $57, saying it expects “old fashioned earnings growth to drive the shares higher.”

Among the firm’s bullish points: a database cycle in full swing, reset growth expectations for the SaaS applications business, the positive impact of cash repatriation and an inexpensive valuation relative to historical ranges.

 
Tuesday, January 2, 2018, 10:20 AM — by Rob DeFrancesco, TechStock Radar
Chart Watch: Electronic Arts

Shares of Electronic Arts (EA, $108.26) have rallied to the 200-day moving average at $108.95, hitting an early high this morning at $109.05.

At the same time, the 50-day moving average is on the decline from $109.38, setting up a potential downside crossover.

On its rebound from the December 5 low of $99.63, the stock has managed to push through the downtrend line from the late October high of $119.84. There is short-term resistance at $110.

 
Tuesday, January 2, 2018, 9:15 AM — by Rob DeFrancesco, TechStock Radar
Macquarie Upgrades Netflix

Macquarie upgrades Netflix (NFLX, $191.96) to ‘Outperform’ and raises its price target to $220 from $200, calling out the company’s pricing power, scaled distribution and international presence.

The firm believes consumers’ increased lack of tolerance for advertising is driving adoption of subscription OTT services, with Netflix a major beneficiary.

   
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