Dubbed ‘the father of value investing,’ Ben Graham once quipped: “Investors should purchase stocks like they purchase groceries, not like they purchase perfume.”
We used the TipRanks’ Daily Analyst Ratings tool and found three stocks under $50 that have received buy recommendations in the last three days from analysts. In the next 12 months, analysts bet these 3 ‘buy’ names have room to run at least 20% more.
Specifically, we sourced software stocks. Orbis Research sees the worldwide enterprise software market rising past $500 billion by 2022. It’s a lucrative market, and stepping into an innovative tech bet could pay off handsomely. Let’s dive right in.
Mobile software maker Digital Turbine (APPS) dished a first quarter earnings loss for 2019 on Thursday. That said, the stock was rising almost 8% by Friday. What swayed Wall Street on this tech player’s prospects?
Roth Capital’s Darren Aftahi believes any weakness in the first quarter was outshined by “bigger news:” Digital Turbine’s renewal with Verizon (VZ). Verizon uses the DT Ignite platform, a key application written by Digital Turbine.
The deal is set to cover four years. In the process, APPS hooks potential for gross margin gains- should stronger revenue tiers be unlocked. By fiscal 2019, Aftahi angles for roughly 31% year-over-year in growth.
In reaction, Aftahi reiterates a Buy rating on APPS stock with a $3 price target (108% upside potential). (See Darren Aftahi’s other stock recommendations).
The ‘Strong Buy’ stock has attracted three buy ratings in just the last three days alone. With a monster return potential of 87%, the stock’s consensus target stands at $2.90. The conclusion: Wall Street sees a killer growth opportunity in Digital Turbine. See APPS Price Target and Analyst Ratings Detail.
Shares of cybersecurity software provider Imperva (IMPV) have vaulted close to 14% in 2018. That said, the stock got hit with sharp pullback following a rocky second quarter earnings show. Wall Street-ers remain confident on the tech player, all the same.
The stock just drew a buy recommendation on Monday from Evercore ISI analyst Kenneth Talanian. The analyst acknowledges “fear, uncertainty, and doubt” among some investors, but ultimately: “we see opportunity.” Bulls, take your advantage here, says Talanian.
While some investors got spooked by a costly M&A move to buy network management startup Prevoty for $140 million, the analyst is unfazed. Talanian believes, “…management must make long-term roadmap decisions to remain relevant in a highly innovative industry.”
Accordingly, the analyst reiterates an Outperform rating on IMPV stock with a $56 price target (22% upside potential). (See Kenneth Talanian’s other stock recommendations)
Talanian makes a bullish case: “We continue to believe this sell-off is overdone and represents a buying opportunity: 1) IMPV shares are worth $39 if you shut the company down and ‘milk’ the recurring billings stream into perpetuity by our ests., which include a (5%) perpetuity growth rate. 2) The shift to more subscription based offerings is a long-term positive, in our opinion. 3) There is an M&A backstop on software companies (esp. small-caps), in our view.”
The ‘Moderate Buy’ stock has stirred up optimism on Wall Street. Over the last three months, 4 analysts have issued buy recommendations. The 12-month average price target stands tall at $57.33, reflecting nearly 25% in upside potential ahead. See IMPV Price Target and Analyst Ratings Detail.
Email management firm Mimecast (MIME) bolsters the safety of business email and data via email protection software. The international company’s first fiscal quarter earnings show for 2019 on Friday sent shares sliding 3%. However, Wall Street analysts continue to love the stock’s market opportunity.
On the fresh heels of a “solid” first quarter print, Deutsche Bank’s Gray Powell reiterated a Buy on MIME stock. Additionally, Powell lifted his price target from $40 to $50 (28% upside potential), not shaken by currency headwinds. (See Gray Powell’s other stock recommendations)
Powell isn’t the only analyst getting more bullish on Mimecast. RBC Capital’s Matthew Hedberg likewise boosted his price target from $46 to $48 (23% upside potential). Hedberg sees a tech player whose results along with execution continue to be robust. This software player has a slew of drivers that Hedberg bets will “have a long tail.”
Notably, out over 4,800 analysts covered on TipRanks, Hedberg has scored a top #6 ranking on Wall Street. On MIME recommendations, Hedberg makes a killing: 88.2% in average profits. (See Matthew Hedberg’s other stock recommendations)
The ‘Strong Buy’ stock has drawn a lot of bulls to its table. In three months, 9 analysts have rated a buy on Mimecast. Rounding out upbeat consensus expectations, the 12-month average price target lands at $48.22. In other words, analysts spotlight almost 24% in upside potential in store for Mimecast. See MIME Price Target and Analyst Ratings Detail.
By Julie Lamb for TipRanks
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.