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Market Outlook

Why Wall Street’s top analysts back Square and Alteryx’s share prices

The stock market is an unpredictable beast, but there are some that try to tame it and, sometimes, they even succeed.

Out of the 6,889 financial experts surveyed by TipRanks, the following four analysts are considered the top-performing in August, based on their most recent predictions.

 

Glenn Greene, Oppenheimer

With an 84% success rate on the platform, Glen Greene, managing director at Oppenheimer, has the best track record so far this year for determining stock ratings. Of his 398 stock ratings in the last year, an incredible 335 have been successful.

Considering Greene’s research focus on finance technology, his coverage tends to concentrate on companies such as PayPal [PYPL], Fleetcor Technologies [FLT] and Fiserv [FISV] — all of which he has rated Buy in the past three months. 

Since June, Greene has also maintained a Buy rating on payment service provider Fidelity National Information Services [FIS], which recovered from the COVID-induced dip in March. The company’s share price is currently up 1.94% YTD at $142.61, as of 19 August’s close.

Shares in Fidelity National Information Services are currently trading 12.9% below Greene’s price target of $161, set on 29 June. At the time, he had predicted that the company was better positioned to capture the growing demand from large financials looking to outsource tech capabilities, The Fly reported.

This was realised in the company’s second-quarter results, when it reported a 40% year-over-year revenue jump to nearly $3bn on 4 August, which was mainly driven by the significant revenue uptick in its merchant solutions business.

40%

Fidelity National Information Services' YoY Q2 revenue rise to nearly $3bn

  

Brent Bracelin, Piper Sandler

Among the current top five analysts on TipRanks, Brent Bracelin, managing director and senior research analyst at Piper Sandler, has the best average return per price target recommendation at 34.7%.

Given his background at Pacific Crest Securities (now KeyBank), where he helped build the company’s profile as a cloud software thought leader, Bracelin’s coverage specialises in cloud applications and analytics software firms such as Twilio [TWLO], Shopify [SHOP] and Microsoft [MSFT]. He currently has a Buy rating on each stock with price targets of $300, $1,300 and $218, respectively, representing a 19.5%, 28.831% and 3.96% jump from their respective closing prices on 19 August. 

Over the past month, he’s issued over 10 research notes — one of the most recent being for analytics specialist Alteryx [AYX]. As of 19 August, the stock is in the green for the YTD, climbing 5.23% to $110.49. It is still 67.4% off Bracelin’s target price of $185 that he set on 7 August.

According to The Fly, in the run up to Q2 results, he expected existing customer expansion metrics to have slowed amid a “large deal of uncertainty that he believes could further reduce second-half revenue growth”. A day later, the company announced a $17.8m loss, although noted a 27% year-over-year increase in customers to 6,714.

 

Joseph Foresi, Cantor Fitzgerald

Despite not issuing any coverage in the last four months — with the exception of maintaining a Buy rating on International Money Express [IMXI] on 5 August — Joseph Foresi, managing director at Cantor Fitzgerald, has an 83% success rate on TipRanks. Additionally, his calls generate a 23.4% return on average.

Most of his research centres on fintech companies including Mastercard [MA], Visa [V] and Square [SQ], as he believes that “credit networks are benefiting from an expanding addressable market”, according to a January StreetInsider report.

One of his most bullish stock picks has been Square. Foresi has had a Buy rating on the stock for the last three years, with one of his best rating calls from September 2017 generating a 231.6% annual return.

On 27 March, he maintained a Buy rating on the stock with a price target of $66, which it hit on 5 May. Square’s share price has since climbed 125.48% to $150.37 on 19 August, following the success of its Cash App, which accounted for 38.2% of the company’s $1.38bn revenue in the first quarter. 

$1.38billion

Square's Q1 revenue - 38.2% of this from its Cash App

  

Foresi had already forecast that Square’s Cash App would be a major revenue driver back in October 2019, when he estimated that it would represent “incremental adjusted revenue growth of 10% on average over three years”, according to TipRanks.

 

Quinn Bolton, Needham

Like Piper Sandler’s Bracelin, Quinn Bolton, managing director, equity research at Needham, also has a top average return price target recommendation on TipRanks at 34.2%.

Of 424 ratings, he has a 77% success rate when it comes to picking winning stocks, which primarily tend to focus on the internal communications and consumer semiconductor spaces, which have benefited from increased demand amid the coronavirus pandemic.

In April, Bolton said that semiconductor giants Intel [INTC], Samsung [5939.KS] and Taiwan Semiconductor [2330.TW] would maintain spending on important equipment to make chips amid the downturn, as he predicted that they wouldn’t want to lose an inch of their competitive positioning.

For the most part, that has been true, with all three citing an uptick in customers. This includes Intel, which reported a 20% year-over-year jump in revenue to $19.7bn for the second quarter, beating on both top and bottom lines thanks to strong demand for its cloud computing services.

“High-quality companies have been washed out with their peers in the wave of negative sentiment, and shares of those companies with disappointing outlooks have been punished” - Quinn Bolton, managing director, equity research at Needham

 

Despite the strong performance, the stock is down 20.56% YTD at $48.33 as of 19 August’s close, representing a 13.8% hike to hit Bolton’s last target price of $55 that was issued on 23 June. His current rating is to Hold the stock.

Bolton believes the rampant sell-off in US semiconductor stocks to be driven by a “shoot first and ask questions later mentality among investors”, according to Barron’s. “High-quality companies have been washed out with their peers in the wave of negative sentiment, and shares of those companies with disappointing outlooks have been punished,” he added.

As the stock market continues into the second half of the year, these top analysts will be ones watch in the months ahead.

Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

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