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TechStock Radar
E-mail: Rob@techstockprospector.com
Technorati
July 2018
Archives
 
Tuesday, July 31, 2018, 9:47 AM — by Rob DeFrancesco, TechStock Radar
Chart Watch: Microsoft

During the recent weakness in the tech sector, Microsoft (MSFT, $106.30) shares came off of the July 25 high of $111.15, but were able to hold above the upwardly trending 50-day moving average of $101.92 as well as short-term support at $103.89. Yesterday’s low stands at $104.76.

 
Tuesday, July 31, 2018, 9:24 AM — by Rob DeFrancesco, TechStock Radar
A Sharp Pullback for Carbon Black

Shares of Carbon Black (CBLK, $20.44) yesterday dipped to a new post-IPO low of $19.85.


The company—a provider of endpoint security solutions—went public in May 2018 at $19 a share, with an opening trade at $24.70.


The stock ran up to a post-IPO high of $35 in the middle of June.

 
Monday, July 30, 2018, 10:21 AM — by Rob DeFrancesco, TechStock Radar
Wedbush Remains Bullish on EA

Wedbush remains bullish on Electronic Arts (EA, $129.40), reiterating its price target of $158. 


While investors appear to be concerned that weakness in live services will persist, and many are concerned that "Battlefield V" will be crowded out by a busy holiday release schedule, the firm thinks these concerns are unwarranted and “vastly overstated.”


EA expects digital sales to represent about 75% of total revenue by the end of FY’19 (March).


EA shares are down from the all-time high of $151.26 reached on July 13.

 
Monday, July 30, 2018, 9:41 AM — by Rob DeFrancesco, TechStock Radar
Piper Jaffray Ups Ultimate PT to $320

Piper Jaffray raises its Ultimate Software (ULTI, $279.92) price target to $320 from $260 ahead of the release of Q2 results tomorrow. 


The firm’s partner checks suggest a strong bookings quarter, particularly in the enterprise, where the company “continues to see an elevated level of activity.”


For more on Ultimate, see TechStock Radar—July 23, 2018.

 
Friday, July 27, 2018, 11:16 AM — by Rob DeFrancesco, TechStock Radar
Stifel Boosts Spotify PT to $225

Stifel raises its Spotify (SPOT, $186.19) price target to $225 from $200 based on continued strong momentum and “no discernible impact” from competition.

In Q2, Spotify added 8 million paid subscribers, bringing the total paid base to 83 million (up 40% y/y).

The firm raises its subscriber and gross margin forecasts for both 2018 and 2019. Stifel now expects Spotify to add more net subscribers in 2018 than it did in 2017, and thinks the company’s peak subscriber growth year could still be ahead of it.

Yesterday, Spotify shares hit a new post-IPO high at $198.99.

 
Friday, July 27, 2018, 10:27 AM — by Rob DeFrancesco, TechStock Radar
Mixed Signals on Intel

BofA/Merrill downgrades Intel (INTC, $47.77) to ‘Neutral’ and reduces its price target to $56 from $62, saying it expects the shares to remain range bound given a deceleration in 2019 earnings growth, a competitive position that’s becoming tougher with next-gen 10nm product delays, higher CapEx from insourcing memory and potential gross-margin declines due to product mix.

Stifel lowers its Intel target to $52 from $60, saying gross margin trends—a key driver of the stock—may not be favorable in 2019 given increasing demand for lower gross margin products, such as iPhone modems and memory.

The firm also warns that the next server CPU cycle may be “well off” the company’s historical tick-tock cadence because Intel is struggling with the transition to the 10nm process node.

KeyBanc trims its target to $58 from $60, but remains positive on the stock, citing datacenter revenue growth re-acceleration from the Purley product cycle that should begin this year, conservative datacenter guidance that de-risks the 2018 model and peripheral growth opportunities in networking, memory and IoT.

Deutsche Bank maintains its ‘Buy’ rating and target of $64, saying Intel’s discount to the market “becomes increasing difficult to ignore” as the company continues to deliver “strong upside” across revenue, operating margin and earnings.

Intel shares this morning are down more than 8%. On a technical basis, there is support at the early April low of $47.29.

 
Thursday, July 26, 2018, 9:48 AM — by Rob DeFrancesco, TechStock Radar
Evercore ISI Trims Facebook PT

Evercore ISI is sticking with Facebook (FB, $177.99) even with rebased expectations for lower top-line growth and meaningfully lower margins than what Wall Street had previously expected.

While reducing its price target to $200 from $235, the firm continues to see value in Facebook’s platform as a unique asset, enjoying a largely unchallenged dominant market position, with the shares now trading at a reasonable forward P/E on reduced 2019 estimates.

 
Thursday, July 26, 2018, 9:23 AM — by Rob DeFrancesco, TechStock Radar
Morgan Stanley Still Likes Facebook

Morgan Stanley reduces its Facebook (FB, $169.99 pre market) price target to $185 from $215 after the company last night implicitly guided Q3 revenue growth to decelerate to 34% year over year (from +42% in Q2) and Q4 growth to slow to 26%.

The guide-down speaks to the growing importance of driving Stories engagement and monetization, says the firm.

Morgan Stanley maintains its ‘Overweight’ rating because it still believes Facebook has among the leading ROIs of any ad platform.

 
Wednesday, July 25, 2018, 10:11 AM — by Rob DeFrancesco, TechStock Radar
Pivotal Research Downgrades Spotify

Pivotal Research downgrades Spotify (SPOT, $185.84) to ‘Hold’ with a price target of $200 based on valuation following the recent run-up.


Also, the firm increasingly thinks the consensus 2018 premium MAU growth expectations are too aggressive.


Pivotal views Spotify’s current valuation as fair, but says it does not leave a lot of room for “operational/market hiccups.”


In the April 2018 issue of Tech-Stock Prospector (TSP #194), we said Spotify shares had valuation upside potential to $180. At the time, the stock was trading at $148.


Spotify shares this morning hit a new post-IPO high of $186.92.

 
Wednesday, July 25, 2018, 9:57 AM — by Rob DeFrancesco, TechStock Radar
JMP Bullish on CyberArk

Industry checks indicate the cybersecurity spending environment in the June quarter was robust, according to JMP Securities. 


The firm raises its CyberArk Software (CYBR, $66.99) price target to $75 from $63 to reflect the positive checks.

 
Tuesday, July 24, 2018, 9:39 AM — by Rob DeFrancesco, TechStock Radar
Morgan Stanley Lifts Apple Target

Morgan Stanley raises its Apple (AAPL, $193.24) price target to $232 from $214 based on continued strength in the Services business as well as the expected announcement of new iPhones in September. 

 
Tuesday, July 24, 2018, 9:27 AM — by Rob DeFrancesco, TechStock Radar
Jefferies Ups Alphabet PT to $1,450

Jefferies boosts its Alphabet (GOOGL, $1,211) price target to $1,450 from $1,360 based on a reasonable valuation for the stock and upside potential for YouTube, Waymo, cloud and hardware.


Alphabet has been a core holding in the Tech-Stock Prospector Vulture Portfolio since May 2010, added when the stock was trading at $249.63.

 
Monday, July 23, 2018, 9:46 AM — by Rob DeFrancesco, TechStock Radar
Ultimate Software Expands in Europe

Ultimate Software (ULTI, $292) last week announced the $300-million acquisition of PeopleDoc, provider of an HR service delivery platform. The cash-and-stock deal is expected to close in Q3. 


Based in Paris, PeopleDoc has more than 1,000 customers representing 4 million+ end users.


JMP Securities likes the transaction, raising its ULTI price target to $317 from $280. The firm says it has received positive feedback on the pending acquisition from industry sources who are familiar with PeopleDoc.


JMP calls PeopleDoc co-founder Jonathan Benhamou a “great sales person,” and says it has heard he will be taking over Ultimate’s sales in Europe (unconfirmed by Ultimate). 

 
Monday, July 23, 2018, 9:33 AM — by Rob DeFrancesco, TechStock Radar
Argus Bullish on Microsoft

Argus raises its Microsoft (MSFT, $106.27) price target to $128 from $116, saying it believes the company is well-positioned to grow its commercial revenue amid the accelerating digital transformation trend thanks to the massive user base and long-term relationships.

 
Friday, July 20, 2018, 9:47 AM — by Rob DeFrancesco, TechStock Radar
Deutsche Bank Ups Amazon Target

Deutsche Bank takes its Amazon (AMZN, $1,828) price target up to $2,200 from $1,800 based on a “large and expanding” TAM, “modest” e-commerce penetration, momentum in the Prime business and accelerating advertising growth. Amazon remains the firm’s ‘Top Pick’ in the large-cap Internet space.

 
Friday, July 20, 2018, 9:35 AM — by Rob DeFrancesco, TechStock Radar
Needham Boosts Skyworks PT to $118

Needham raises its Skyworks Solutions (SWKS, $98.50) price target to $118 from $110, saying the chipmaker’s mobile business is positioned for content growth with the anticipated Q4 launch of key smartphone platforms. Looking out longer term, the firm sees positive trends for the Sky5 suite of products for 5G networks.

 
Thursday, July 19, 2018, 10:09 AM — by Rob DeFrancesco, TechStock Radar
Chart Watch: Arista Networks

Shares of Arista Networks (ANET, $279.41) are approaching resistance at $287 from the middle of June after rebounding from the recent low of $252.25 and taking out short-term resistance at $279.18.


The stock is back above its 50-day moving average, which has turned upward from $264.95.

 
Thursday, July 19, 2018, 10:01 AM — by Rob DeFrancesco, TechStock Radar
Morgan Stanley Downgrades F5

Morgan Stanley downgrades F5 Networks (FFIV, $171.52) to ‘Underweight’ with a price target of $130 following a reseller survey that pointed to a continued deceleration in sales over the near-term and declining sales next year. 


The firm’s checks suggest an in-line June quarter, but the surveys have typically been a one to two quarter leading indicator for F5’s growth.

 
Wednesday, July 18, 2018, 9:51 AM — by Rob DeFrancesco, TechStock Radar
Chart Watch: Zuora

Shares of Zuora (ZUO, $26.40) have retreated from the post-IPO high of $37.78 reached on June 18, hitting a low of $23.87 last week. A small rebound has put the stock back above its 50-day moving average of $25.65. There’s short-term resistance at $29 and $30.68.

 
Wednesday, July 18, 2018, 9:39 AM — by Rob DeFrancesco, TechStock Radar
2 Bulls on Mellanox

Loop Capital maintains its Mellanox Technologies (MLNX, $85.90) price target of $125, saying the company stands to benefit from the adoption of high-speed Ethernet network interface cards and switches by hyperscale Internet/Web 2.0 companies.


Benchmark takes its MLNX target up to $120 from $110 based on above-consensus revenue growth expectations. The firm continues to see Mellanox as “a prime M&A target,” with a good strategic fit for NVIDIA, Marvell or Broadcom.

 
Tuesday, July 17, 2018, 9:57 AM — by Rob DeFrancesco, TechStock Radar
Chart Watch: Tableau

Tableau Software (DATA, $108.88) shares this morning hit a new 52-week high at $109.34. The stock has rallied sharply off of the pivot low of $92.01 set on June 25.


The next key resistance level stands at $109.40 from August 2015. 

 
Tuesday, July 17, 2018, 9:50 AM — by Rob DeFrancesco, TechStock Radar
Chart Watch: Imperva

Shares of Imperva (IMPV, $55.55) have pushed through short-term resistance at $53.95, hitting a new 52-week high at $55.55. The next resistance level to watch is $57.25 from October 2016. The RSI is rising from 73.8.

 
Monday, July 16, 2018, 10:29 AM — by Rob DeFrancesco, TechStock Radar
A Broadcom Bull

Piper Jaffray believes the Broadcom (AVGO, $201.94) purchase of CA Technologies (CA, $44.03) “will prove to be one of the best acquisitions for the company” over the past several years. The firm thinks the deal’s earnings accretion could be close to $3.57 a share. Piper maintains its AVGO price target of $293.

 
Monday, July 16, 2018, 9:24 AM — by Rob DeFrancesco, TechStock Radar
Loop Capital Bullish on Amazon Prime Day

Loop Capital maintains its Amazon (AMZN, $1,813) price target of $1,900, saying the company’s Prime Day starting today will be “highly successful” in generating significant shopping volume, driving incremental new membership numbers and providing “valuable free advertising.”


The firm notes that Prime Day this year will contain six additional hours relative to last year and also integrate Whole Foods into the mix.

 
Friday, July 13, 2018, 9:44 AM — by Rob DeFrancesco, TechStock Radar
Zendesk Hits New All-Time High

Shares of Zendesk (ZEN, $59.84) this morning hit a new all-time high at $60.44.


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


The total return so far on this recommendation: +163%.

 
Friday, July 13, 2018, 9:38 AM — by Rob DeFrancesco, TechStock Radar
Jefferies Ups Facebook PT to $240

Jefferies raises its Facebook (FB, $207.23) price target to $240 from $215 ahead of the Q2 reporting season. 


The firm believes Facebook continues to offer the best ROI for advertisers, with Instagram now adding more ad opportunities.


Jefferies sees EPS of $10+ “on the horizon.” Putting a 25x to 30x multiple on that would yield a stock price of $250 to $300 for Facebook, says the firm. 


The latest 2018/2019 consensus EPS estimates: $7.73/$9.26.

 
Thursday, July 12, 2018, 10:32 AM — by Rob DeFrancesco, TechStock Radar
ServiceNow Hits New All-Time High

ServiceNow (NOW, $191.53) shares this morning hit a new all-time high at $191.31.


The cloud-software provider has been a core holding in the Tech-Stock Prospector Vulture Portfolio since August 2014, added when the stock was trading at $55. The total return so far on this recommendation is +248%.

 
Thursday, July 12, 2018, 10:23 AM — by Rob DeFrancesco, TechStock Radar
Broadcom Shares Fall on CA Deal

Shares of Broadcom (AVGO, $204.45) this morning are down 16% after the chipmaker announced it would acquire software vendor CA Technologies (CA) for $44.50 a share in cash in a deal worth $18.9 billion. 


Wall Street at first glance isn’t so keen on this acquisition because it’s out of Broadcom’s wheelhouse. The deal is financially positive, but the strategic rationale is much harder to figure out.


RBC Capital downgrades Broadcom to ‘Outperform’ and reduces its price target to $300 from $330, saying the deal places the chipmaker “in the penalty box from a valuation expansion perspective.” 


While the transaction offers “strong accretion” and provides a “foundation to perhaps scale its model beyond the traditional semiconductor sector,” Broadcom is also entering a market where it has limited history, likely tempering investor optimism on the stock going forward, says RBC.


MKM Partners questions the rationale for “adding a low-growth software asset to the company’s strong portfolio of semiconductor technologies.”

 
Wednesday, July 11, 2018, 10:03 AM — by Rob DeFrancesco, TechStock Radar
Chart Watch: Proofpoint

Following a recent pullback, shares of Proofpoint (PFPT, $121.06) are in rally mode, approaching the 50-day moving average at $121.38. The RSI is on the rise from 53.


From the all-time high of $130.27 reached on May 10, Proofpoint shares had declined nearly 13% at the July 2 low of $113.51.

 
Wednesday, July 11, 2018, 9:35 AM — by Rob DeFrancesco, TechStock Radar
Citi Remains Bullish on Intel

Citi expects “solid” Q3 guidance from Intel (INTC, $51.61) given that the PC market “appears to remain strong.” The firm points out that June notebook shipments rose 12%, beating expectations.

 
Tuesday, July 10, 2018, 9:32 AM — by Rob DeFrancesco, TechStock Radar
BTIG Research Upgrades Check Point

BTIG Research upgrades Check Point Software (CHKP, $102.71) to ‘Buy’ with a price target of $120, saying it thinks it’s time to get more constructive on the stock following three quarters of underperformance.


There is growing evidence of “increased sales force effectiveness” and “signals of a trough in expectations,” says the firm.

 
Tuesday, July 10, 2018, 9:24 AM — by Rob DeFrancesco, TechStock Radar
Apple Has AR Upside Potential

BofA/Merrill lifts its Apple (AAPL, $190.58) price target to $230 from $225 because it thinks augmented reality (AR) adoption is set to grow materially following the launch of ARKit 2. 


The firm sees AR adding $1 billion to Apple’s revenue from App Store downloads alone by the end of fiscal 2020, and also thinks increased usage of AR apps will help drive higher iPhone sales.

 
Monday, July 9, 2018, 9:24 AM — by Rob DeFrancesco, TechStock Radar
MKM Partners Bullish on Spotify

MKM Partners reiterates its Spotify (SPOT, $175.70) price target of $200, saying the company is “best positioned and has the most interest in advancing a healthy music industry.”


The firm says that after 20 years of under-investment, the music industry can start to rebuild, particularly when it comes to recruiting/promoting artists and connecting them to fans. 


MKM Partners believes Spotify can benefit from “large value creation opportunities” and expects the company to “significantly increase” its market share over the next five years.

 
Monday, July 9, 2018, 9:17 AM — by Rob DeFrancesco, TechStock Radar
Piper Jaffray Upgrades FireEye

Piper Jaffray upgrades FireEye (FEYE, $15.98) to ‘Overweight’ and raises its price target to $20 from $17 following a recent round of partner checks showing “a significant improvement” in demand trends for the company.


The firm’s contacts noted that FireEye’s new pricing bundles are having a positive impact on overall demand, which it believes is sustainable. Piper Jaffray is looking for positive operating income and FCF starting in Q3.

 
Friday, July 6, 2018, 10:29 AM — by Rob DeFrancesco, TechStock Radar
Chart Watch: Microsoft

Microsoft (MSFT, $100.21) shares have retaken the $100 level following the recent successful test of the 50-day moving average at $98.44. 


There’s short-term resistance at $100.63 and $102.50. The 200-day moving average continues to trend upward from $89.12.

 
Friday, July 6, 2018, 10:16 AM — by Rob DeFrancesco, TechStock Radar
Loop Capital Lifts Apple PT to $210

Loop Capital raises its Apple (AAPL, $186.78) price target to $210 from $195 based on net positives for the second half of the year, including continued strong momentum in the Services unit and the expected launch of a lower-priced, LCD-based iPhone X. 

 
Thursday, July 5, 2018, 10:34 AM — by Rob DeFrancesco, TechStock Radar
Chart Watch: Rapid7

After correcting 19% from the all-time high of $33.92 reached on June 14, Rapid7 (RPD, $28.73) shares are trying to consolidate around current levels. The pivot low of $27.37 was reached on June 28.


Rapid7 shares are above their upwardly trending 200-day moving average of $23.93, but remain below the 50-day moving average of $30.70. There’s short-term resistance at $29.45.

 
Thursday, July 5, 2018, 10:16 AM — by Rob DeFrancesco, TechStock Radar
KeyBanc Trims Intel Target

KeyBanc trims its Intel (INTC, $50.10) price target to $60 from $65, but reiterates its ‘Overweight’ rating. 


While the firm says datacenter demand trends remain robust in the near-term, it believes these four factors will act as a drag on the stock’s valuation: 


1-14nm notebook platform delays in 2H’18

2-A sub-seasonal Q3 demand outlook at notebook ODMs

3-New AMD (AMD) EPYC design wins at cloud customers for 2019

4-10nm manufacturing delays

 
Tuesday, July 3, 2018, 10:17 AM — by Rob DeFrancesco, TechStock Radar
Cowen Lifts Netflix Target to $430

Cowen raises its Netflix (NFLX, $398) price target to $430 from $375 based on the firm’s proprietary survey showing the platform was the most often viewed for content in the home.


The firm looks for strong Q2 results, as it expects the company’s originals to serve as a positive tailwind. Cowen also raises its long-term international subscription forecast.

 
Monday, July 2, 2018, 10:34 AM — by Rob DeFrancesco, TechStock Radar
Chart Watch: Shopify

Shares of Shopify (SHOP, $148.30), down from the all-time high of $175.11 reached on June 20, are in the process of testing the 50-day moving average at $147.64.

There’s short-term support at $140.40. The 200-day moving average is trending upward (although beginning to flatten out) from $124.29.

 
Monday, July 2, 2018, 10:20 AM — by Rob DeFrancesco, TechStock Radar
Citi Remains Bullish on Apple

Citi says Apple (AAPL, $186.06) iPhone order cuts and the negative news flow surrounding a demand slowdown have worked together to recalibrate consensus estimates to lower levels.

The firm thinks the materially reduced estimates for the iPhone are now in line with its numbers, which have not meaningfully changed in several quarters.

Apple shares now present an attractive value, according to Citi. The firm maintains its price target of $200.

   
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