Jefferies Says Software Is Cheap and Should Outperform: 4 to Buy Now

Apps & Software

Published: January 25, 2016 9:55 am

Last Updated: January 13, 2020 2:38 pm

The only good thing about blistering wicked sell-offs is they provide opportunity, especially when the economy is most likely not headed for recession. While many of the perma-bears are now out of their dens and prowling, the state of the market is not all that bad. With many of the indicators strategists look to for clues to direction indicating that upside could be close at hand, it’s a good time for investors to consider some selective buying.

A new Jefferies research note point outs that with the recent selling and pullback factored in, a higher percentage of software stocks are trading below the intrinsic value of their recurring revenue streams alone than over the past three years. In other words, the good companies are cheap. We screened the Jefferies software coverage universe and found four stocks rated Buy with the biggest upside to the Jefferies price targets.

Check Point Software Technologies

This remains one of the top tech stocks to buy on Wall Street for a security presence, and it is said to be in talks with CyberArk. Check Point Software Technologies Ltd. (NASDAQ: CHKP) is one of the best in helping customers protect against advanced persistent threats. It is considered a worldwide leader in securing the Internet, providing customers with uncompromising protection against all types of threats, reducing security complexity and lowering the total cost of ownership. Check Point first pioneered the industry with FireWall-1 and its patented stateful inspection technology.

The revenue growth rate has accelerated almost every quarter over the past year and a half. Many on Wall Street think that Check Point should see year-over-year accelerating growth in product licenses, particularly as the security firewall refresh appears to be in the beginning stages. Acquiring CyberArk could add a fresh product offering to the company’s already industry leading portfolio.

The company reported outstanding third-quarter results on strong demand for its advanced threat prevention and mobile security technologies.

The Jefferies price target for the stock is $100. The Thomson/First Call consensus price target is $92.82. The stock closed Friday at $75.43.