Oppenheimer Very Bullish on 3 Red-Hot Technology Stocks
Unlike fragmented legacy products, the Palo Alto Networks security platform safely enables business operations and delivers protection based on what matters most in today’s dynamic computing environments: applications, users and content. The platform has new features that were introduced to help security professionals overcome the distractions and time spent on problems caused by the overwhelming volume of alerts and manual processes associated with operating many discrete security products, and, instead, expand breach prevention capabilities and boost operational efficiency.
The company continues to be ranked the highest with the Wildfire product, which has been the favorite in the advanced persistent threat space among the value added resellers who carry and sell the product. Toss in solid upside in billing potential for 2016 and 2017, and the story is a killer going forward. Many analysts on Wall Street have made it clear that the feedback they get from the professionals at security conferences is the most bullish on Palo Alto, and the company is gaining real traction with larger data centers’ firewalls.
The company reported inline results this week, but it missed other key metrics due to increased sales and marketing expenses, which brought the sellers out in full force. Oppenheimer feels that this is an outstanding buying level, as the stock gapped down almost 10%.
Oppenheimer has a big $177 price target for the stock, and the consensus target is $181.25. The stock traded Thursday at $137.66.
This 2015 IPO looks to be offering investors a big upside in flash storage. Pure Storage Inc. (NYSE: PSTG) offers customers disruptive, software-driven storage technology combined with a customer-friendly business model that drives business and IT transformation for customers through dramatic increases in performance and efficiency at lower costs.
Pure Storage FlashArray//m is simpler, faster and more elegant than any other technology in the data center. FlashArray //m is ideal for the move toward big data and for performance-intensive workloads, such as cloud computing, database systems, desktop virtualization, real-time analytics and server virtualization.
The stock price hit bottom in June, falling almost 50% from highs hit after the initial public offering, and the Oppenheimer analysts feel that the potential the company has is nowhere near what Wall Street expectations are now. They said this in the report:
Since our initiation (2/3/16 at $12.43) we’ve been positive on Pure’s all-flash technology/positioning, execution, and growth potential within a large enterprise/cloud storage total addressable market. Valuation was the primary reason behind our Perform rating, but at current levels we believe too much negativism is built-in. Our thesis is largely unchanged. We’re bullish on Pure’s progress toward CF breakeven and profitability, and its ability to capitalize on differentiated technology, AFA growth, and on expansion opportunities with new products (especially FlashBlade), new customers, and internationally.
Oppenheimer lifted the rating on the stock to Outperform and has a $15 price target. The consensus target is even higher at $16.60. The shares traded at $11.66 on Thursday.
These are three top plays for aggressive accounts, with two presenting very enticing entry points. While not suitable for more conservative accounts, these companies should continue to remain leaders in their respective technology arenas.