The 7 Best Tech Stocks to Buy for the Second Half of 2019
So far in 2019, the tech stocks have been pretty volatile place for investors. After a dismal May, tech stocks returned to strong form this month. In fact, on June 11, tech stocks posted their best six-day stretch in 7½ years! The end of the U.S.-Mexico tariff threat and optimism that the Fed will soon lower interest rates all helped drive prices higher.
But that’s looking back.
And if we look forward, which tech stocks should you be adding to your portfolio as we head towards the second half of 2019? These tech stocks to buy all hold a ‘Strong Buy’ Street consensus. That’s based on all the ratings published by analysts on these stocks over the last three months. I also ensured that these stocks score strongly on other key metrics, including upside potential from current trading levels. With this in mind, let’s take a closer look at these top 7 tech stock picks now:
Elastic NV (ESTC)
Elastic NV (NYSE:) is a leading modern search platform with a unique open-source distribution model. This Amsterdam-based company helps people explore their data differently using the power of search. For instance, the Elastic Stack lets companies take data from any source, in any format, and search, analyze, and visualize it in real time.
The company is buzzing right now following a solid beat-and-raise quarter. Strong customer adoption and a rapid expansion rate saw revenue growth hit 63% y/y. Meanwhile the $234M acquisition of Endgame (expected to close in 3Q20) should accelerate expansion into endpoint security use-cases.
Such success hasn’t gone unnoticed. Over the last week Elastic has received four back-to-back buy ratings from the Street. “We are raising estimates and PT to $110 from $102 on a compelling growth opportunity” cheers KeyBanc analyst . His new PT suggests 39% upside potential lies ahead.
“The current growth trajectory, breadth of enterprise use-cases, and popularity within the open-source community with 350M software downloads give us confidence the business model can scale to $1B+ revenue within five years as it gains share within a large $45B TAM [total addressable market” sums up the Top 10 analyst. I agree, and would argue that now is the time to buy into this top tech stock. Interested in Elastic stock?
To put it bluntly, this is a crazy time for ride-hailing service Uber Technologies Inc (NYSE:). First came the much-hyped IPO. Next came the departure of key executives. And yet unlike some other recent IPOs (looking at you Beyond Meat (NASDAQ:)), Uber actually seems like a promising investing proposition.
“Baby you can drive my car” is how RBC Capital analyst started his coverage of UBER. That came with a Buy rating and a price target of $62 (44% upside potential). “Uber is the leading global player in massive ridesharing & meal delivery TAMs, generating robust growth, with leading technologies, products & ops. We also see significant option value in new business units (e.g. Freight)” wrote Mahaney.
The analyst also added: “We believe the market underappreciates UBER’s profit potential.”
As for the departures of COO Barney Harford and CMO Rebecca Messina, Wedbush’s is staying bullish on the stock. “While in the near term around the edges this could add some uncertainty… we would rather management rip the bandaid off and make these changes now in the executive suite with minimal disruption expected.”
Indeed, 21 out of 26 analysts rate the stock a buy — hence its ‘Strong Buy’ Street consensus. Meanwhile the $54 average analyst price target still indicates further upside potential of 26%. This means there’s plenty of room for shares to surge higher in 2H19.
You have probably used SurveyMonkey (NASDAQ:) at some point or another. “Our mission is to power the curious” states the online survey platform. It even has a term for this kind of knowledge — ‘people powered data.’ Last week, SVMK announced the hiring of Debbie Clifford as the new CFO. Debbie was one of the architects in transforming Autodesk into the $35B company it is today, and has extensive M&A experience.
That’s good news for a company firmly on track for a blockbuster 2H19. “We believe SVMK is set up to show accelerating revenue growth in 2H19/2020, and potentially grow in excess of 20% for years to come” writes SunTrust Robinson .
With SVMK investing aggressively in its Enterprise sales force (doubling its headcount in 2019), he views this year as a crucial investment period and a base for accelerating top line growth. That’s with sales force productivity gains driving financial outperformance in 2020 and beyond.
Squali has just boosted his price target from $20 to $22. This new Street-high price target means we are looking at sizable upside potential of 32%. “The need for enterprises to better understand/respond to feedback, SVMK’s easy-to-use software and disruptive pricing are what underpins our positive thesis” the five-star analyst concludes.
Bear in mind, out of over 5,000 analysts Squali’s in the Top 35 for his strong stock picking skills. In any rate, ‘Strong Buy’ stock SVMK scores 100% buy ratings from the Street.
Black Knight (BKI)
Turning to the booming world of fintech brings us Black Knight Inc (NYSE:). Black Knight provides integrated tech, workflow automation, data and analytics to the mortgage industry. Most notably, BKI’s MSP mortgage processing platform (>50% US residential loan share) is a unique “crown jewel” asset, driving most of the company’s value.
While that might not sound like the most exciting industry out there, BK does deserve a closer examination. First off shares have surged 35% year-to-date. And all four analysts covering the stock rate it a ‘Buy.’ Most recently Top 5 analyst, Oppenheimer’s reiterated his buy rating and hiked his price target from $60 to $67.
Following a meeting with Black Knight management, he told investors: “We suspect BKI has solid visibility into its intermediate-term revenue growth, driven by its implementation backlog of >$160M, which it expects to convert over the next three years.”
In addition, considering its visible long-term growth prospects, shares are trading at highly reasonable levels right now. “Valuation also appears attractive, considering the company’s near- and long-term growth and profitability (i.e., >40% EBITDA margins) prospects, and the recent tax reform benefits” says Greene.
Since reporting stronger than expected Q1 results on June 4, Salesforce.com Inc (NYSE:) had a new surprise for investors. On June 10, Salesforce revealed that it was acquiring data analytics platform Tableau (NYSE:) in a massive $15.7 billion all-stock deal.
“We are bringing together the world’s #1 CRM with the #1 analytics platform. Tableau helps people see and understand data, and Salesforce helps people engage and understand customers. It’s truly the best of both worlds for our customers,” said Marc Benioff, Chairman and co-CEO of Salesforce.
Analysts are certainly giving the deal the thumbs up. “Overall, we believe adding an analytic cloud is part of the natural evolution. History indicates 40% upside, CRM is still a growth company, we reiterate our Outperform rating and $185 price target,” commented top Northland Securities analyst .
Similarly, William Blair’s called the deal “strategically sound.” CRM can now “become a deeper digital transformation partner to its customers by adding this data analytics and visualization layer” says Blair, as he compared the potential synergies to Salesforce’s MuleSoft acquisition.
In total, 25 out of 25 analysts covering CRM rate the stock a ‘Buy.’ Meanwhile the average analyst price target of $183 translates into upside potential of 22%.
Cloud-based business planner Anaplan Inc (NYSE:) is a relative newcomer to the investor universe. PLAN hit the markets in October 2018 with an extremely successful IPO. Since then the stock has continued to outperform, rewarding investors with a 75% gain year-to-date.
Not that this is the end of the road for Anaplan. Shares should continue to move higher in the second half of the year. PLAN is a strong secular story in the SaaS world — and investors are continuing to warm up to the stock over time.
Case in point: five-star KeyBanc analyst has just upgraded Anaplan from Hold to Buy. “We have increasing confidence in the upside levers to FY20 consensus growth estimates of 37% y/y vs. 47% y/y last quarter and are upgrading PLAN to Overweight on promising share gain prospects within a large $21B TAM” explained Bracelin.
Meanwhile Monness analyst is even more bullish. His $62 price target works out at 31% upside potential. “Since all organizations must plan in some capacity, and many have yet to embrace the digital transformation of their planning processes, we believe the SaaS planning market remains in the nascent stages of development and has the potential to be significant” the analyst tells investors.
That’s perfect for Anaplan which views itself as “pioneering the category of Connected Planning, which allows organizations to transform their businesses by making better and faster decisions.”
A wave of recent buy ratings has confirmed DocuSign Inc’s (NASDAQ:) ‘Strong Buy’ status. The company is perhaps a riskier pick right now, with shares trading down 10% over the last five days. But this pullback could represent a savvy buying opportunity for investors willing to take the plunge.
As the name suggests, DocuSign pioneered e-signature technology, and today offers the world’s #1 e-signature solution. This means you don’t have to worry about printing, scanning or sending bulky documents internationally.
However, share prices dropped after the company reported mixed fiscal Q1 earning results. “We view these as temporary setbacks and continue to believe in the long-term opportunity,” KeyBanc analyst stated post-results. As DocuSign transfers to the cloud, a minor disruption in sales cycles is to be expected, he said.
And the quarter was still strong for customer acquisition, large customers growth, and international expansion, which supports “a more bullish fundamental story,” Owens wrote.
“There are little changes to our forward expectations, … we would use weakness as a buying opportunity for the leading e-signature player ahead of likely accelerating market adoption,” Owens reassured investors. He has a $65 price target on DOCU (36% upside potential).
In fact several analysts gave similar responses to the earnings ‘hiccup’. Analysts from Piper Jaffray, Citigroup, and JP Morgan all specifically referred to the selloff as a buying opportunity. That means shares should move higher over the rest of the year.
offers exclusive insights for investors by focusing on the moves of experts. See what the experts are saying about your stocks now at TipRanks.com. As of this writing, Harriet Lefton did not hold a position in any of the aforementioned securities.
The post appeared first on InvestorPlace.