Stifel Raises Price Targets on 5 Stocks to Buy That Crushed Estimates

Investing

Published: May 8, 2020 8:15 am

The stock market has taken investors and companies on the kind of ride rodeo cowboys go through on a bucking bronco. While many top stocks have been thrown during this difficult period, some are hanging on and showing some pretty impressive results. With the first-quarter earnings results winding down, some of the last companies to report are coming in with some outstanding results.

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A series of new Stifel research reports not only dissect the numbers and the forward guidance, if any was given, they also included adjusted price targets. In many cases, even with shares rated Buy, they have been raised.

We screened the Stifel research looking for stocks to buy for which the analysts actually raised the price targets. We found five that either beat estimates or delivered a bullish quarter with positive commentary that look like solid picks now for growth accounts with a degree of risk appetite.

Fastly

This edge cloud computing company posted another strong quarter. Fastly Inc. (NYSE: FSLY) is an emerging technology leader in the high-growth content delivery networking (CDN) market. CDN vendors deliver content for enterprises and media/content providers, charging per bandwidth delivered.

Fastly’s network architecture is a combination of best-of-breed hardware and a patented software stack based on open source protocols. This unique stack enables the company to immediately deliver content globally and provide differentiated edge compute services and programmability.

The company reported solid quarterly results and the analysts noted this:

Fastly delivered another quarter of strong top-line growth (+38.1% Y/Y), driven by stronger demand for the company’s edge cloud platform among both new and existing users across all geographies and verticals (management called out FinTech and E-Commerce verticals). Revenue growth was additionally supplemented by increased internet usage, due to recent “stay-at-home” measures.

The Stifel price target was raised from $25 to $30 and probably will go higher. The Wall Street consensus target is $26.78. Fastly stock closed Thursday at $33.58, up a gigantic 45% on the day.

HubSpot

This stock has rallied up from the March lows but looks ready to break out. HubSpot Inc. (NYSE: HUBS) is a cloud-based provider of inbound marketing tools such as website content management, blogging tools, email campaign, search engine optimization, social media monitoring and management, customer relationship management and others for small businesses and midsized companies.

The company’s tools provide a single console for marketing professionals to generate new customer leads, convert leads to customers and customers to repeat customers. The Stifel analysts remain impressed and noted this:

On Wednesday, after the market closed, HubSpot announced first quarter 2020 results that beat consensus estimates across key areas. Notably, HubSpot achieved its first quarter of >5000 net customer additions while growing its average subscription revenue per customer by 2% year-over-year. As its community navigates COVID-19 and the related shutdown, HubSpot has proactively offered flexible terms to certain customers and commission prepayments to partners. While the result of decisions may be near-term contraction in fundamentals, we believe HubSpot will reap the rewards of these moves longer-term, as the cost to acquire a customer far exceeds the cost of retaining one.

Stifel has lifted its $175 price target to $200, while the consensus target is $167.29. HubSpot stock closed Thursday at $188.53, after a solid 7.6% gain for the day.

Papa John’s

This well-known pizza company has been a COVID-19 winner and is always a solid play for more conservative accounts. Papa John’s International Inc. (NASDAQ: PZZA) operates and franchises pizza delivery and carryout restaurants.

Its Domestic Company-Owned Restaurants segment consists of the operations of all domestic company-owned restaurants and derives its revenues principally from retail sales of pizza and side items, including breadsticks, cheese sticks, chicken poppers and wings, dessert items and canned or bottled beverages.

The North America Commissaries segment consists of the operations of regional dough production and product distribution centers and derives its revenues principally from the sale and distribution of food and paper products to domestic company-owned and franchised restaurants in the United States and Canada.