Investing

Red-Hot Tech and Biotech Companies Highlight Jefferies Top Stocks to Buy

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 Jefferies analysts remain impressed:

HubSpot reported a strong first quarter, getting out of the gate quickly in 2020. COVID-19 headwinds hit in late March and the company lowered guidance as a result. We are encouraged that after an initial 2-3 weeks of headwinds to retention and bookings in March and early April, HubSpot began to benefit from a tailwind from companies looking to shift from offline to online marketing and that cancellations and downgrades have started to stabilize into a new normal in April. We believe the decision to provide fiscal year 2020 guidance itself reflects the resilience of the business model and the company’s customers/partners.

The Jefferies price target was lifted to $202. The consensus target is $167.29, and Hubspot stock closed most recently at $183.54.

Neurocrine Biosciences

This biopharma company is partnering with a top big pharmaceutical company and the data has been very solid. Neurocrine Biosciences Inc. (NASDAQ: NBIX) is focused on developing and commercializing therapies for neurological and endocrine disorders. The company’s lead asset is Ingrezza, approved for the treatment of tardive dyskinesia and in development for the treatment of Tourette syndrome.

The company has partnered with AbbVie on elagolix, in development for the treatment of endometriosis and uterine fibroids, and it is developing opicapone as an adjunct therapy for Parkinson’s disease.

The Jefferies report said this:

We remain positive for NBIX based on survey-predicted growth prospects for Ingrezza. Our docs prescribe Ingrezza to a significant portion of new patients for both mod-to-severe and mild TD, and see a pattern to continue through 2021. Despite a foreseen Covid impact in the second and third quarter of 2020, we think Ingrezza sales could re-accelerate in 2021, driven by a new sales force and TD awareness program. For the first quarter of 2020 our revenue estimate exceeds consensus by 3%, despite first quarter insurance resets.

The $115 Jefferies price target compares with the $118.05 consensus figure. Neurocrine Biosciences stock closed at $113.57, up close to 4% on Monday.

RingCentral

This smaller cap company could be a great takeover target, and it is a member of the Jefferies Franchise Picks list. RingCentral Inc. (NYSE: RNG) offers a cloud-based solution for business communications that replaces legacy and expensive on-premise communications systems. It is delivered as an application that follows the user regardless of device (office phone, smartphone, desktop, tablet). Features include voice, text, fax, audio conferencing and integration with document and customer relationship management systems.

For some time, Jefferies has believed the company has multiple catalysts, including continued traction with mid/enterprise customers, increased partner traction, international expansion and continued dislocation in the industry from legacy PBX/UC vendors.

Last year, Avaya entered into a strategic partnership with RingCentral in which it will introduce a new unified communications as a service (UCaaS) solution. Under the agreement, RingCentral will contribute $500 million to the deal and will be Avaya’s exclusive provider of UCaaS solutions.

After the solid results, the analysts noted this:

Despite significant global disruption, RNG posted a strong first quarter and raised 2020 subscriber revenue guidance by more than the beat (ex-FX). Work-from-home measures are spurring adoption and faster sales and implementation cycles. Strong April data (+40% growth in new logos) is encouraging, and we expect the ramp of ACO, continued momentum w/ other partners, traction upmarket, and international growth to drive 2020 and likely lead to acceleration in 2021. Guidance looks appropriately conservative and leaves room for outperformance as the macro backdrop improves.

The $245 Jefferies price target was raised to $290. The posted consensus target is $251.14. RingCentral stock saw a more than 3% gain on Monday to close at $275.03.

These five top stocks to buy are surviving nicely, with solid results posted and, best of all, reasonably positive outlooks through the second quarter and beyond. It’s important after the big snapback rally we have had that investors tread carefully and perhaps scale into positions.

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