Analysts Are Bullish on These Technology Stocks: PAYC, HUBS

By Carrie Williams

There’s a lot to be optimistic about in the Technology sector as 3 analysts just weighed in on Paycom (NYSE: PAYC), HubSpot (NYSE: HUBS) and Endurance International (NASDAQ: EIGI) with bullish sentiments.

Paycom (NYSE: PAYC)

Oppenheimer analyst Brian Schwartz reiterated a Buy rating on Paycom (NYSE: PAYC) today and set a price target of $65. The company’s shares closed yesterday at $60.52, close to its 52-week high of $61.20.

Schwartz commented:

“Paycom’s business performed well in 1Q with very solid results against the toughest quarterly comparisons this fiscal year, a raised 2017 outlook, and with low near- term estimate risks because of 1Q’s business outperformance. On balance, the number of office starts YTD lags past years, and though it takes two years for a new office to ramp and impact financials, the lag could foretell moderating beat-and- raise magnitudes in future results absent better productivity. Bottom Line: While noting a healthy current valuation on PAYC shares, we see the strong 1Q results and improved outlook lending support to PAYC’s unique profile among SaaS investments —a category leader capable of generating above SaaS industry/high growth and a very profitable bottom line.”

According to TipRanks.com, Schwartz is a top 25 analyst with an average return of 21.4% and a 75.0% success rate. Schwartz covers the Technology sector, focusing on stocks such as Palo Alto Networks, Callidus Software, and Ultimate Software.

Paycom has an analyst consensus of Moderate Buy, with a price target consensus of $59.

HubSpot (NYSE: HUBS)

Oppenheimer analyst Koji Ikeda reiterated a Buy rating on HubSpot (NYSE: HUBS) today and set a price target of $78. The company’s shares closed yesterday at $66.65, close to its 52-week high of $69.10.

Ikeda commented:

“Consistent with our mid-quarter update, HubSpot’s business strengthened in 1Q with results above consensus and a higher 2017 outlook. The bookings strength in 1Q is visible across: billings, subscription billings, net-new customers, deferred revenue, and international. These positive trends lend support to a good open-ended growth opportunity and an increasingly visible positive FCF inflection in 2017. On balance, management introduced new metrics that should enhance transparency, but may take time for investors to gain comfort with. Bottom line: We view the 1Q results as a salient proof point indicating our improving business fundamentals thesis is taking hold, and we see a favorable setup for ongoing upward revisions to estimates in upcoming quarterly results as good share catalysts.”

Ikeda has an average return of 20.4% when recommending HubSpot.

According to TipRanks.com, Ikeda is ranked #2343 out of 4572 analysts.

Currently, the analyst consensus on HubSpot is Strong Buy and the average price target is $72.11, representing an 8.2% upside.

In a report issued on April 26, Pacific Crest also reiterated a Buy rating on the stock.
Endurance International (NASDAQ: EIGI)

In a report released today, Jason Helfstein from Oppenheimer reiterated a Buy rating on Endurance International (NASDAQ: EIGI), with a price target of $12. The company’s shares closed yesterday at $7.30.

Helfstein noted:

“Endurance reported better than expected 1Q:17 revenue and in-line EBITDA, while maintaining FY17 guidance. The current trajectory of the business implies it is likely EIGI will achieve FY17 free cash flow guidance of $150M. We believe the stock should trade at 11x 2017 free cash flow, which is reflected in our $12 target. Clearly the market disagrees with this valuation, as improving visibility around the free cash flow guidance has done nothing to get the stock moving. We see three potential catalysts to close the valuation gap: 1) stronger than expected CTCT revenue growth in LATAM (launch late 2017), 2) harvest brands generate incremental margin improvement, 3) new CEO has significant operational/financial experience.”

According to TipRanks.com, Helfstein is a 5-star analyst with an average return of 11.7% and a 61.1% success rate. Helfstein covers the Technology sector, focusing on stocks such as Interxion Holding NV, IAC/InterActiveCorp, and Angie’s List Inc.

Currently, the analyst consensus on Endurance International is Moderate Buy and the average price target is $10.50, representing a 43.8% upside.

In a report issued on April 24, Jefferies also reiterated a Buy rating on the stock with a $10.50 price target.

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