While most of the eyes that watch the technology sector have been on the semiconductors, as the group has posted a huge year, the top software companies also have had an incredible 2017 year to date. With less than three months to go, and third-quarter earnings reports right around the corner, many of the top firms we cover here at 24/7 Wall St. are doing reviews and are out with top picks in the software silo.
A new Baird research report notes that as a whole the industry had a very solid third quarter, and like many on Wall Street the analyst remains positive, especially on the top SaaS (software as a service) companies. We screened the firm’s research universe, and found five stocks rated Outperform that look to still have good upside potential for the rest of 2017 and into next year.
This high-profile old-school software company has been posting outstanding earnings. Adobe Systems Inc. (NASDAQ: ADBE) operates in three segments. The Digital Media segment provides tools and solutions that enable individuals, small and medium businesses, and enterprises to create, publish, promote and monetize their digital content. The other segments are Digital Marketing and Print and Publishing.
Top analysts feel there are an additional 11.7 million potential users, driven by growth in the creative community, student and teacher penetration and conversions from the piracy. Market and value expansion provide additional upside. The company posted outstanding second-quarter numbers and the rest of the year looks very solid.
While revenue and earnings beat consensus expectations, focus was on the lackluster third-quarter bookings in Experience Cloud and shares traded slightly lower. Many think the forecasting miss was due to Adobe’s increasing strategic role and success in selling larger deals with lengthening sales cycles.
The Baird price target for the stock is $160, and the Wall Street consensus target is $164.30. Shares closed on Monday at $151.50.
This stock has traded sideways since May and looks ready to breakout and go higher. Autodesk Inc. (NASDAQ: ADSK) is a design software and services company providing a range of solutions for customers in architectural, engineering, construction, manufacturing, geospatial mapping and digital media markets.
The company sells 2D horizontal design solutions like AutoCAD and AutoCAD LT 3D model-based design solutions that are widely used design software tools. Autodesk products allow users to simulate and analyze real-world performance by creating digital prototypes early in the design process.
Baird has a $125 price target, and the consensus target is $123.86. Shares closed on Monday at $117.14.
This top SaaS company reported solid second-quarter results as billings drastically improved. Salesforce.com Inc. (NYSE: CRM) provides enterprise cloud computing solutions, with a focus on customer relationship management to various businesses and industries worldwide.
It offers enterprise cloud computing applications and platform services, including Sales Cloud that enables companies to store data, monitor leads and progress, forecast opportunities, gain insights through relationship intelligence and collaborate around sales on desktop and mobile devices.
The company also provides Service Cloud, which enables companies to deliver personalized customer service and support, as well as connect their service agents with customers on various devices; and Marketing Cloud, which enables companies to plan, personalize and optimize customer interactions.
The company has recently been upgraded at several top Wall Street firms and looks to be breaking out of a triple top formation.
The $110 Baird price target compares with the consensus target of $107.37. The shares closed Monday at $96.27.
This company has come into the spotlight as a potential takeover candidate. Citrix Systems Inc. (NASDAQ: CTXS) is leading the transition to software-defining the workplace, uniting virtualization, mobility management, networking and SaaS solutions to enable new ways for businesses and people to work better.
Citrix solutions power business mobility through secure, mobile workspaces that provide people with instant access to apps, desktops, data and communications on any device, over any network and cloud. Strategic mergers and acquisitions and internal development have expanded Citrix’s addressable markets beyond access to legacy Windows applications to include desktop and server virtualization, team collaboration and application networking.
Baird has set its price objective at $90. That compares with the consensus figure of $85.11 and the most recent close at $80.62.
This red-hot stock has had an outstanding year. ServiceNow Inc. (NYSE: NOW) develops and sells a hosted, subscription-based suite of services designed to automate various IT department functions, such as help desk, operations management and change/release management.
The company also sells a number of applications that automate various self-service-related applications outside of the IT department, such as HR onboarding, facilities requests and governance, risk and compliance.
The Baird price target is $120. The consensus target is $127.33, and shares closed Monday at $121.33.
These are five top stocks to look at for aggressive accounts. With third-quarter earnings in the queue, investors may want to buy partial positions and see how the results come in.