Nasdaq touched record highs again on Wednesday as investors continue to pile into technology, despite the successful coronavirus-affected spaces and hard-hitting cyclicals have had since early November. That said, gains have been somewhat subdued since the passage of the new $ 900 billion relief package, which was mostly already priced.
Investors are also still trying to digest what the new coronavirus-based travel bans from the UK could mean as the US and much of the global economy prepare for a harsh winter amid new restrictions. Yet rising cases of coronavirus have not dampened overall optimism, especially as the vaccine is rolled out.
Along with the possibility of about 100 million Americans being vaccinated in February or March, the earnings prospects for the S&P 500 for next year are strong. And it cannot be stressed enough how useful the low interest rate environment is likely to continue to be for equities.
This means that bullish investors are likely to look for stocks to buy in 2021. And the broader technology sector may still be the best place to find winners despite its run, because it has the growth prospects and impact on all aspects of the economy to help to justify sky-high stock prices …
Digital Turbine, Inc. APPS
The Digital Turbine stock went into absolute tears in 2020 for its ability to succeed in an important space focused on the ever-growing world of smartphones and apps. Digital Turbine works to connect OEMs, mobile operators and publishers with advertisers and developers for “frictionless app and content discovery, user engagement and engagement, operational efficiency and revenue generation.” Austin, the Texas headquarters, boasts that it has delivered more than “three billion app loads for tens of thousands of advertising campaigns.”
APPS has created Deloitte’s Technology Fast 500 list several times, and it completed its acquisition of Mobile Posse in March. The agreement helps create a more robust offering for clients by adding Mobile Posses’ “package of highly engaging content discovery products.” APPS revenue in the financial year 2020 increased 34%, which came on top of FY19’s 39% and was mostly organic as it only covered one month of Mobile Posse operations.
The company topped our Q2 FY21 estimates at the end of October, and Zacks estimates require FY21 revenue to increase by 105%, and FY22 is expected to reach a further 29% higher to reach $ 364 million. In the meantime, adjusted earnings are expected to increase by 215% and 37% over this stretch, respectively.
As we touched on earlier, APPS has risen over 700% in 2020 from $ 7 per share. Shares for around $ 60. Digital Turbine has surpassed other pandemic high-flyers like Tesla TSLA, Zoom Video ZM and Shopify SHOP, and it hit new records on Tuesday.
Digital Turbine’s earnings prospects have also increased since the last report to help it land a Zacks Rank # 2 (Buy) at the moment. APPS also gets an “A” class for growth in our Style Scores system, and three of the five brokerage firm recommendations that Zacks has for Digital Turbine come in for a “Strong Buy”.
Zendesk, Inc. ZEN
Zendesk is a cloud-focused CRM company with a software portfolio focused on sales, support and customer engagement. The company boasts over 160,000 customers from startups to large companies.
ZEN topped our Q3 estimates at the end of October, and it’s poised to grow as more companies from a variety of industries are forced to step up their digital transformations. “Traditional brick companies are embracing new models of engagement across stores, e-commerce and new channels such as social and messaging …”, the company wrote in a letter to shareholders last quarter.
ZEN has risen 85% in the last year to double the industry average. This is part of a more impressive race that saw it rise by 325% over the last three years. Recently, Zendesk has risen 45% in the following three months, hitting a new high of around $ 144 per share. Action Wednesday.
Zack’s estimates call for ZEN’s revenue to jump over 25% by 2020, reaching over $ 1 billion. $ Currently, and FY21 is expected to come a further 23.5% higher. And the adjusted EPS is expected to rise by 81% to reach $ 0.56 this year and then rise by 37% next year.
Zendesk has also ruined our bottom line estimates over the next three periods, and its positive earnings reviews are helping it earn a Zacks Rank # 2 (Buy) on the move. And Wall Street remains high on the stock in the middle of it, with nine of the 14 brokerage firm recommendations Zacks has at a “strong buy”, with two more at a “buy”, and none under a team.
CrowdStrike is a cloud-focused cybersecurity company that uses machine learning and AI to protect endpoints and cloud workloads. This is crucial in the cloud age, which is full of fast-growing endpoints that include laptops, desktops, smartphones, IoT devices and more. Teleworking and schooling helped push this area of the ever-growing cybersecurity space to the forefront. And the stock has risen to new heights in the wake of the SolarWinds hack.
CRWD shattered our 3rd quarter estimates in early December with 86% sales, adding nearly 1,200 new subscription customers. More importantly, business leaders raised their prospects. With this in mind, Zacks urges the company to swing from an adjusted loss of – $ 0.02 per share. Stock in the same period last year to + $ 0.08 in the fourth quarter on 64% stronger revenue.
CrowdStrike is also expected to swing everything from a full-year loss of – $ 0.42 per share. Stock to + $ 0.22 in FY21, where FY22 is expected to rise almost 50% higher to $ 0.32. CrowdStrike’s revenue is expected to jump 78% this year to hit $ 859 million and then pop 40% higher to reach $ 1.21 billion in FY22. These estimates would come on top of FY20’s 93% increase in sales for the company, which was announced in June 2019.
Shares in CrowdStrike have risen 50% in the last month, hitting all-new highs of around $ 227 on Wednesday. More broadly, the cybersecurity firm’s stock has risen 370% over the past year to nearly triple the industry average.
CRWD’s enhanced EPS outlook helps it get a Zacks Rank # 2 (Buy), and it cuts “B” qualities for growth and momentum. Finally, 12 of the 17 broker ratings that Zacks has for CRWD sit at a “strong buy” with two more for a “buy”. Therefore, investors might consider CrowdStrike as a growth-focused game and a secular bet on cybersecurity.
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