This top analytics company could be an easy bolt-on for a larger big data company, and it has been a rumored takeover candidate. Teradata Corp. (NYSE: TDC) is one of the global leaders in data warehousing. Its solutions include software, hardware and related business consulting and support services. The company’s focus on business solutions for analytics, coupled with industry-leading technology and architecture expertise, makes it an in-demand service provider.
The analysts said this in early May:
Teradata reported inline with pre-announcement. All metrics did better than original guidance. Timing of deals, lack of annual recurring revenue raise and weaker second half outlook create an attractive opportunity as the annual outlook is conservative. We model EPS above the high end of guidance (similar to last qtr) and note consensus estimates are moving higher.
The $67 BofA Securities price target is well above the $55 consensus target. Teradata stock closed at $46.56 on Tuesday.
This is a leader in the cloud software space and a Wall Street favorite. Workday Inc. (NASDAQ: WDAY) provides enterprise cloud applications worldwide. Its applications help its customers to manage critical business functions and optimize their financial and human capital resources.
Its Workday Financial Management application provides functions of general ledger, accounting, accounts payable and receivable, cash and asset management, revenue management and grants management, as well as project and resource management, time and expense tracking, project billing, revenue recognition, financial reporting and analytics.
It also provides Workday Human Capital Management application, which includes human resources management, such as workforce lifecycle and organization management, compensation, absence and employee benefits administration. It also includes global talent management, comprising goal and performance management, succession planning and career and development planning, as well as Skills cloud, a machine-learning-powered universal skills language to help source, utilize, develop and retain talent.
The analysts said this:
Channel feedback suggests improving new deal activity, citing strength in HCM and positive Accounting Center feedback. Believe first quarter bookings and current remaining performance obligations of $1.24 billion (+18% year-over-year;+17% ex-Peakon) and $6.69 billion (+21% y/y) likely versus. base of $1.14b billion and $6.51 billion. Reaffirm as top pick with Buy rating and our price objective representing 12x our calendar year 2022 revenue estimate of $4.982 billion (+18% y/y).
BofA Securities has set a $300 price objective. The $255.84 consensus target for Workday stock compares to Tuesday’s close at $236.57 a share.
While certainly better suited for aggressive growth investors with a higher risk tolerance, these top stocks offer the best entry points in some time. Given the frothy stock market and potential for a summer pullback, it may make sense to buy partial positions now and scale capital in through the summer months.
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