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The Zacks Analyst Blog Highlights: MongoDB, Domo, Universal Display, CyberArk and Acacia

Zacks Equity Research
MKS Instruments (MKSI) first-quarter 2019 results are dented by lower semiconductor spending despite contribution from Electro Scientific Industries that was acquired in the quarter.

 

For Immediate Release

Chicago, IL –April 1, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: MongoDB MDB, Domo DOMO, Universal Display OLED, CyberArk Software CYBR and Acacia Communications ACIA.

Here are highlights from Friday’s Analyst Blog:

5 Top-Ranked Tech Stocks that Gained More than 50% in Q1

As we draw the curtain on first-quarter 2019, most of the discussions are centered on the technology sector’s impressive rebound. Notably, the Technology Select Sector SPDR has returned 18.2% year to date, outperforming the S&P 500’s rally of 12%.

Technology’s recovery can be attributed to the positive development on the U.S.-China trade-war front, strong demand for AI-based solutions, rapid adoption of cloud and solid IT spending environment. Gartner expects IT spending to be up 3.2% this year to $3.8 trillion, driven by enterprise software, cloud and digital-transformation efforts.

Notably, tech-heavy Nasdaq has gained 15.5% on a year-to-date basis primarily backed by the recovery in technology stocks.

Technology’s Growth Drivers Aplenty

Technology has become ubiquitous. Improvement in Internet speed and penetration globally, rapid adoption of cloud services, and proliferation of Internet of Things (IoT) that is facilitating connected devices and smart homes, are key catalysts. Increasing allegiance to online gaming, music and video-streaming services also deserves a special mention in this regard. 

The omnipresence of Internet has aided the companies with a wealth of information provided by their users. Notably, per recent IDC estimates, the global datasphere will grow to 175 zettabytes (that is a trillion gigabytes) by 2025, from 33 zettabytes in 2018. The secular growth trend in data is helping technology companies infuse AI and machine & deep learning into their solutions.

Moreover, sectors like finance, banking, healthcare, education, defense & aerospace, media, among others, are embracing technology rapidly. This is helping the companies in these sectors satisfy the needs of different stakeholders and grow faster. This growing diversification is also boosting revenue and earnings visibility of technology solution providers.

Additionally, the accelerated deployment of 5G technology and faster-than-expected growth in robotics set the stage for more development.

Despite the heightening uncertainty due to recession rumors and Brexit-related volatility, the aforesaid factors present significant growth opportunities for technology investors for the rest of 2019.

Picking the Winning Stocks

With the help of the Zacks Stock Screener, we pick five tech stocks that have gained more than 50% in the first quarter. Apart from having strong fundamentals, these stocks either flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy), and have a market cap of more than $1 billion. You can see the complete list of today’s Zacks #1 Rank stocks here.

Year-to-Date Price Performance

Top Picks

New York-based MongoDB currently sports a Zacks Rank #1 and has a market cap of $7.84 billion. The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering average positive surprise of 22.9%.

MongoDB’s expanding customer base, supported by solid demand for core database solution, makes it an attractive bet despite stiffening competition from Amazon. At the end of fiscal 2019, MongoDB had more than 13,400 customers, up roughly 130% from fiscal 2018.

MongoDB Atlas, the company’s fully-managed global, multi-cloud database service, surpassed $100 million in annualized revenue run rate in less than three years since its launch, reflecting solid demand. Atlas revenues surged more than 400% year over year and accounted for 34% of revenues in the last reported quarter (fourth-quarter fiscal 2019).

The Zacks Consensus Estimate for fiscal 2020 has narrowed from a loss of $1.34 to $1.01, over the past 60 days.

Currently, American Fork, UT-based Domo carries a Zacks Rank #2 and has a market cap of $1.07 billion.

An expanding clientele is rapidly driving Domo’s momentum. In the last reported quarter (fourth-quarter fiscal 2019), Domo’s solutions were selected by 17 new enterprise customers. The number of customers with more than $1 billion in revenues at the end of the quarter was 447, up from 375 at the end of the year-ago quarter.

Domo recorded average positive earnings surprise of 11.8%, over the preceding four quarters. Moreover, the consensus mark for fiscal 2020 has narrowed from a loss of $4.06 to $4.02, in 60 days’ time.

Ewing, NJ-based Universal Display also carries a Zacks Rank #2, at present. The company generated average positive earnings surprise of 14.4%, over the last four quarters. It has a market cap of $7.14 billion.

This leading developer of Organic Light Emitting Diodes (OLED) solutions is benefiting from new OLED-based product launches from premium handset makers like Apple, Google, Huawei, Oppo, Samsung, and Vivo. Furthermore, synergies from Adesis acquisition are a key catalyst.

The Zacks Consensus Estimate for its current-year earnings moved up a dime to $2.18, over the past 60 days.

Petach Tikva, Israel-based CyberArk Software came up with average positive earnings surprise of 57.8%, in the preceding four quarters. The stock currently carries a Zacks Rank #2 and has a market cap of $4.19 billion.

The IT security solutions provider is benefiting from increasing demand for privileged access security on the back of digital transformation. Stellar revenue growth across the Americas, EMEA and APJ is driving the top line. Additionally, the company is gaining momentum among advisory firms like Deloitte, PWC, KPMG, among others.

The Zacks Consensus Estimate for its 2019 earnings has increased 5.3% to $1.98, in the past 60 days.

Maynard, MA-based Acacia Communications currently carries a Zacks Rank #2 and has a market cap of $2.23 billion. The company outpaced the Zacks Consensus Estimate in three of the trailing four quarters, delivering average positive surprise of 50.7%.

Acacia’s diversifying revenue base and expanding product portfolio are noteworthy. The company is expected to benefit from strong sales of CFP2-DCO, AC1200 and standalone PIC products. Moreover, increasing adoption 5G presents a significant growth opportunity for the company. Despite trade war and tariff-related concerns, strong spending by router vendors in China is also encouraging.  

The Zacks Consensus Estimate for its ongoing year’s earnings moved up 5.6% to $1.51, in 60 days’ time.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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CyberArk Software Ltd. (CYBR) : Free Stock Analysis Report
 
Acacia Communications, Inc. (ACIA) : Free Stock Analysis Report
 
Universal Display Corporation (OLED) : Free Stock Analysis Report
 
MongoDB, Inc. (MDB) : Free Stock Analysis Report
 
Domo, Inc. (DOMO) : Free Stock Analysis Report
 
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