Technology

After Cisco Makes Daring Last-Minute M&A Buy, Are These Hot Companies Next?

HubSpot

This stock has sold off some since November and is offering a nice entry point. HubSpot Inc. (NYSE: HUBS) provides a cloud-based marketing and sales software platform for businesses in the Americas, Europe and the Asia-Pacific. Its software platform includes integrated applications, such as social media, search engine optimization, blogging, website content management, marketing automation, email, customer relationship management, analytics and reporting that enables businesses to attract visitors to their websites, convert visitors into leads and close leads into customers. The company also offers professional and phone and email-based support services.

The company posted strong billings growth of 48% when it reported in November. The company also had an impressive 20% increase in net new customers. The company’s pro sales product now has about 5,000 customers, and it is becoming a contributor to growth and has great potential to improve unit retention across the base.

The $62 Stifel price target is lower than the consensus target of $65.26. The shares closed most recently at $53.40.

SecureWorks

This smaller cap company had a 2016 IPO and could potentially explode for investors this year. SecureWorks Corp. (NASDAQ: SCWX) is a security services carve-out of Dell, and it offers its global customers security services, outsourcing and consulting. The company is a leader in the $8.7 billion managed security services market, and it also addresses the broader IT security outsourcing and consulting markets.

The company combines its proprietary software platform, the Counter Threat Platform, with its internal security experts to remotely monitor and manage customer-owned security appliances.

SecureWorks reported third-quarter results were better than expected, and the forward guidance was in line, but some revenue and customer metrics were lackluster. Margin improvement and consistent performance was likely overshadowed by decelerating revenue and customer growth. Top analysts believe the company remains positioned to expand further into larger enterprises and internationally.

The Stifel price target is set at $18, while the consensus target is $15.09. The shares closed most recently at $10.63.

Tableau Software

This red-hot stock also has been a rumored takeover target for some time. Tableau Software Inc. (NASDAQ: DATA) provides business analytics software products in the United States, Canada and elsewhere. The company offers Tableau Desktop, a self-service analytics environment that empowers people to access and analyze data independently, and Tableau Server and Tableau Public, a free cloud-based platform for analyzing and sharing public data.

The company’s business intelligence platform with data management and scalability has the security to foster the sharing of data. The stock was more than cut in half from highs printed in the summer of 2015, and it may really be a value for a larger company looking to expand its data analytics presence.

The $75 Stifel price target is much higher than the consensus target if $54.44. The stock closed trading on Wednesday at $47.84.

These are awesome companies, and while it would be huge if they were bought, they all have strong franchises moving forward and can stand on their own. They are, however, only appropriate for extremely aggressive accounts.