Investors have differing views on the value of sell-side research. Some swear by it, while others prefer to build their investment thesis around other tenants. There are certainly cases to be made for both positions.
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What is less controversial is that Wall Street analysts are the best resource we have when it comes to humans who know intimately the inner workings of the companies they follow. They’re far from perfect, but neither are the best algorithms and robots.
So while it is easier to argue that any analyst can be wrong in their valuation of a stock, the argument becomes harder to make when several analysts are of the same opinion. Of course, there is always the possibility that the herd is wrong, but it is less likely than with a single analyst.
The point here is that there is power in numbers. And when multiple analysts react the same way to an earnings report, press release, or other development, it deserves special attention.
Is it a good time to buy Uber Technologies shares?
This week a Uber Technologies (NYSE: UBER) The SEC filing showed the company expects better third quarter results than expected. Management now expects bookings of $ 23 billion at mid-term, which would translate into a sequential improvement of 7% from last quarter.
The increase in Uber’s key performance metric may not seem so big, but it confirms that the demand for its transportation and food delivery services is moving in the right direction. Better yet, the company’s updated EBITDA outlook suggests that EBITDA profitability could be achieved in the current quarter, a period ahead of schedule.
In response to the upward revisions, Wall Street took an equally bullish stance on Uber stocks. Eight companies reiterated their “buy” ratings and some increased their target prices to $ 78. The bullish remarks referred to easing pressures on pricing and wait times due to an increased cavalry of Uber drivers.
Granted, you might not have to be a genius to upgrade a stock after such an overwhelmingly positive report. But when eight analysts cram into Uber like a clown car, investors should seriously consider jumping in.
Is Adobe Stock a Post Profit Purchase?
Some thought Adobe (NASDAQ: ADBE) the stock was too hot to touch as it traded at $ 300… and $ 400… then $ 500. So, with the software juggernaut currently trading above $ 600, buying here can really come late to the party. Maybe not.
According to several vendor-side companies, Adobe has more room to operate. A whopping 11 analysts called the stock a “buy” Tuesday; two opted for a “hold” note. Target prices varied widely, but most were over $ 700. This included the influential Goldman Sachs analyst who gave Adobe a target of $ 765.
The wave of bullish opinions stems from the company’s third quarter financial results report, released the same day. For the 11e consecutive quarter, profits have exceeded the consensus figure. Record revenues have also shown that demand for Adobe’s cloud-based solutions is alive and well despite fears that sales will weaken when offices reopen.
Surprisingly, however, Adobe’s stock has not risen as a result of the report and seller-side support. This could be related to the fact that the market has become more cautious this month. When this has happened, high-flying tech stocks often face the greatest skepticism.
This only makes Adobe stocks a little cheaper for investors with a long-term view. The way we do business and learn is going digital fast. As long as Adobe continues to launch new solutions in more industries, it will be part of this growth for years to come.
Are analysts bullish on Workday stock?
Yesterday was indeed a working day for Working day (NASDAQ: DAY) analysts. Eight companies provided an update on the company and in each case the conclusion was the same: buy. The wave of bullish opinions marked the 12e ‘buy’ rating issued on the share since the beginning of the month.
Workday hosted its annual Analyst Day on Tuesday where analysts clearly appreciated what they heard. Among other comments, viewers appreciated that management expects revenues to hit $ 10 billion and operating margins to trend nearly 25% over the long term. Plans to expand the company’s product portfolio have also gone well.
Similar to the Workday actions, Workday’s human capital management (HCM) and financial management software have been strong demand in recent years. Even before the pandemic, organizations were migrating to cloud-based payroll and associated software solutions. The Workdays were among the most sought after. At the end of the last quarter, more than half of the Fortune 500 companies were Workday customers.
Since Workday’s sales teams have been able to better connect with reopened businesses, the results have shown. And as the digital transformation continues to unfold in U.S. businesses, Workday and its shareholders can look forward to a nice paycheck ahead.