Today we’ve looked for stock ideas using the Top Analyst Stocks page, which gathers stocks that have received recent ratings from Top Ranked Analysts. Focusing on the technology sector, we found three stocks with a Strong Buy consensus from Wall Street, and Price Targets with some ambitious upside potential. Lets take a closer look.
Silicon Motion (SIMO)
The first Analyst Top Stock on our list is Silicon Motion. They develop, manufacture, and supply semiconductors for the electronics market, and are a global leader in developing NAND flash controllers for solid-state storage devices (SSD). You can find their products across a variety of applications, such as automotive systems, smartphones and PCs. Since 2014, they have shipped over 731 million SSD controllers, and are the largest SSD controller supplier since 2021.
On May 2nd, Silicon Motion shared their first quarter earnings report, where the tech company saw both an earnings and revenue beat. EPS of $0.64 beat estimates by $0.08, and revenue of $189.31M beat by nearly $9M. While revenue did decrease 6% QoQ, it did increase 53% YoY. The company increased their future outlook, and for FY 2024 they are expecting revenue of $800M to $830M, which would represent 25% to 30% YoY growth. Wallace Kou, President and CEO of Silicon Motion noted, “Our highly differentiated controller solutions enable PC and smartphone OEMs to utilize high performance, higher density and lower cost solid state storage to enable cutting edge applications such as AI-at-the-edge. Based on our strong start to the year and our increasing backlog, we are increasing our full-year outlook.”
The Silicon Motion stock has caught the eye of several 5-star analysts, including Craig Ellis of B. Riley Financial. Just this week, he reiterated his Buy rating on the SIMO stock. The analyst is encouraged by “strong-looking execution inside the industry’s nascent” PC and smartphone recovery. Along with his Buy rating, Ellis increased his Price Target on the stock from $109 to $112. Ellis is currently ranked #72 out of 8,934 Wall Street Analysts, and has an 89% success rate on the SIMO stock. (To see Ellis’ track record, click here)
Overall, the SIMO stock has 9 analyst ratings, all which rate the stock a Buy. Along with a unanimous Strong Buy consensus, the average Price Target of $94.38 implies an upside potential of 18.51% from current prices. (See Silicon Motion’s Stock Forecast)
Instructure Holdings (INST)
Our second Top Analyst Stock is Instructure Holdings, which is an educational technology company dedicated to helping everyone learn together. Founded in 2008, Instructure developed Canvas, which is a cloud-based LMS that offers assessments, video learning, grade books and more. Teachers use Canvas to create and manage course work, while students can access it for homework, grades, and lectures. Canvas is the #1 teaching and learning software, and was the foundation of the Instructure platform. They also created an assessment management system, called Mastery Connect, and a tool called Impact, which helps school districts deepen edtech adoption by helping administrators get specific about how tech is being used. Instructure supports more than 30 million educators and learners at more than 6,000 organizations around the world.
Their first quarter earnings report came out on May 8th, with EPS of $0.22 beating expectations by $0.08, and growing over 15% YoY. Revenue also came in ahead of estimates at $155.5 million, growing 20.7% YoY. During the quarter, Instructure completed their acquisition of Parchment, which is the world’s largest academic credential management platform. On July 1st, they completed another acquisition of Scribbles, a leading provider of credentialling and records managements to k-12 schools across the US. Both acquisitions will help expand their networks and customer base, unlocking exciting new growth opportunities. Steve Daly, Instructure CEO said “our first quarter results exceeded all guided metrics and demonstrate the durability, operational scale, and breadth of the Instructure platform.”
5-star analyst Joseph Vruwink of Robert W. Baird maintained a Buy rating on Instructure Holdings. He noted that Instructure has demonstrated significant efficiency leading to an EBITDA margin increase from 38% to 42%. This growth in revenue and margins, combined with an upbeat forecast for FY24, signals a strong financial position and potential for increased profitability, contributing to the Outperform rating. Vruwink is currently ranked #433 out of 8,932 Wall Street Analysts, and has a 71% success rate on the INST stock. (To see Vruwink’s track record, click here)
With 7 current analyst ratings, the INST stock is rated a Strong Buy with unanimous buy ratings. The Average Price Target of $29.50 implies an upside potential of 22.51% from current prices. (See Instructure Holding’s Stock Forecast)
JFrog (FROG)
Third on our list of Top Analyst Stocks is JFrog. They provide an end-to-end hybrid, universal DevOps platform, working to achieve Continuous Software Release Management (CSRM). The CSRM platform enables organizations to continuously deliver software updates across any system. With their ‘Liquid Software’, they aim to create a world of delivering software from developer to device without friction. JFrog’s platform is available on-premise, open-source, or on any cloud. The company boasts that 83% of Fortune 100 companies, plus millions of developers globally, trust their company as their end-to-end software supply chain partner.
On May 9th, JFrog shared their first quarter earnings report, and did see their stock decline despite strong results. Their Q1 EPS of $0.16 beat estimates by $0.02, and grew 166% YoY. Total revenues of $100.3M also exceeded expectations, and grew 26% YoY, while Cloud Revenues were up 47% in Q1. Shlomi Ben Haim, JFrog CEO and Co-founder, commented “The landscape of DevOps and security is undergoing dramatic change, and I’m thrilled about the future prospects for JFrog… Q1 was another quarter of strong execution as we exceeded the high-end of our guidance measures.”
Following their quarterly earnings report, 5-star analyst Koji Ikeda of Bank of America Securities, reiterated their Buy rating on the FROG stock. He referenced JFrog’s acquisition of Qwak AI, noting “this move will better entrench JFrog into enterprise DevSecOps workflows and bolster the company’s ability to meet its ambitious FY27 financial targets, including a compounded annual revenue growth rate of 22-24% from 2024 to 2027, and a free cash flow margin of 26-29%.” Overall, the forecasted demand environment and the strategic acquisition provide a solid foundation for Ikeda’s optimistic outlook on JFrog’s performance. Ikeda is currently ranked #263 out of 8,932 Wall Street Analysts, and has an 89% success rate on the FROG stock. (To see Ikeda’s track record, click here)
JFrog’s Strong Buy rating is based on 15 current analyst ratings, with 13 Buys and 2 Holds. The average Price Target of $46.38 implies an upside potential of 30.17% from current prices. (See JFrog’s Stock Forecast)
Check out the TipRanks Top Analyst Stocks page to find other stock ideas!
