There’s a lot to be optimistic about in the Technology sector as 2 analysts just weighed in on Zynga (NASDAQ:ZNGA) and Blucora (NASDAQ:BCOR) with bullish sentiments.
Zynga (ZNGA)
In a report released yesterday, Timothy O’Shea from Jefferies maintained a Buy rating on Zynga, with a price target of $5.25. The company’s shares closed yesterday at $3.85.
O’Shea said:
“Bookings and EBITDA margin (18.7%) were the best in around six years, and the high-growth mobile business now accounts for a full 90% of bookings. Growth is driven by key mobile games and Poker. Given the near-term roadmap we believe bookings growth will continue, and we model ZNGA crossing its 20% EBITDA margin goal in 3Q. We note ZNGA is actively pursuing M&A; EBITDA ests could rise by 15% or more if it fully deploys its cash. ZNGA posted 2Q results ahead of guidance and consensus. Bookings grew +12% Y/ Y to $234MM, above $228MM consensus and $218MM guide. Adj. EBITDA grew +46% $47MM consensus and $46MM guide. Adj. EBITDA margin of 18.7% was the highest since 2Q’12, 6 years ago. Management is making nice progress against its goal of delivering 20% EBITDA margin by the end of 2018. Our model assumes ZNGA crosses that milestone in 3Q, ahead of plan.”
O’Shea has an average return of 12.1% when recommending Zynga.
According to TipRanks.com, O’Shea is ranked #887 out of 4839 analysts.
The word on The Street in general, suggests a Strong Buy analyst consensus rating for Zynga with a $5.04 average price target, implying a 30.9% upside from current levels. In a report issued on July 26, Wedbush also maintained a Buy rating on the stock with a $6 price target.
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Blucora (BCOR)
Benchmark Co. analyst Daniel Kurnos maintained a Buy rating on Blucora today and set a price target of $43. The company’s shares closed yesterday at $37.15, close to its 52-week high of $40.60.
Kurnos observed:
“We acknowledge that valuation looks a bit rich at these levels, but the likely conservative 3Q guide, plus future upside in both 4Q and beyond from interest rate hikes and flow through from the clearing transition, leaves material room for shares to move higher, in our view. 2Q revenue of $157.8 million, up 13%, was ~$4 million ahead of consensus, with the upside split evenly vs. our forecast between the two segments. On Tax, pricing came through as we had surmised thanks to the larger industry players taking up their own offerings to offset the rising battle for free units, although the flow through was slightly more than we anticipated. We think this past tax season illustrated a more nimble approach, partly aided by significant tech investment, which should support sustainable paid unit growth going forward.”
According to TipRanks.com, Kurnos is a 5-star analyst with an average return of 11.5% and a 53.3% success rate. Kurnos covers the Services sector, focusing on stocks such as Chicken Soup For The Soul Entertainment Inc, Booking Holdings Inc, and Sinclair Broadcast.
The word on The Street in general, suggests a Strong Buy analyst consensus rating for Blucora with a $45 average price target, which is a 21.1% upside from current levels. In a report issued on July 18, Barrington also assigned a Buy rating to the stock.
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