With the stock market booming and the big cap technology stocks missing their second-quarter numbers, the tech analysts at Lazard Capital Markets are doing the deep-dive to find the names that can show significant growth through the rest of the year. In a recent report, they stressed the theme of quality, sustainable earnings. This is opposed to the technology companies that have highly seasonal or cyclical earnings. Here are some of the top technology stocks to buy now at Lazard.
Netgear Inc. (NTGR) sold off on recent earnings guidance, and the Lazard team thinks this is a perfect entry point on one of their top names. They are convinced that Netgear remains the best play in the consumer wireless connectivity trend. The Thomson/First Call estimate for the stock is $38.
Citrix Systems Inc. (CTXS) is the number one top name to buy. It blew away the second-quarter expectations and is poised for a strong second half of 2013. Lazard also thinks the company is playing possum with the third-quarter earnings guidance and deliberately being very conservative. The consensus price target for this top name is $78.
NetSuite Inc. (NYSE: N) Provides cloud-based financials/enterprise resource planning (ERP) software suites in the United States and internationally. It offers NetSuite, a platform with financials/ERP, customer relationship management (CRM), professional services automation (PSA) and e-commerce capabilities that automate processes across departments. The company delivered strong earnings yesterday and is looking to trade higher. The consensus price target for this possible takeover candidate is $81, which is far below the current trading level.
F5 Networks Inc. (FFIV) posted tremendous second-quarter revenues, and the guidance for the rest of the year was very positive. The company provides application delivery networking technology that secures and optimizes the delivery of network-based applications, and the security, performance and availability of servers and other network resources. The consensus price target for this top tech name is $93.
EMC Corp. (EMC) got a huge boost when VMware Inc. (VMW) reported strong earnings. EMC still holds a large majority of the stock and traded up in conjunction with VMware. Also the solid results in EMC’s core storage business are helping to drive earnings for the rest of the year. The consensus target for this storage leader is $30.50. Investors are paid a small 1.6% dividend.
Western Digital Corp. (WDC) posted better-than-expected earnings late Wednesday in a tough market, but shares fell Thursday. Western Digital said revenue for its fiscal fourth quarter ended June 28 fell 23% to $3.7 billion. That was above analyst consensus estimates of $3.62 billion. Earnings per share minus items of $1.96 fell 41% but beat consensus estimates of $1.81. The consensus price target for the stock is $70, and investors are paid a 1.4% dividend.
The technology sector has underperformed the overall market this year, and some of the big earnings disappointments may keep investors wary. However, many corporate information technology budgets are expected to open up as the economy improves. As budgets revive, tech earnings will follow.