Check out today's top analyst calls from around Wall Street, compiled by The Fly.
ON THE SIDELINES: Barclays analyst Ryan MacWilliams initiated coverage of Zoom Video (ZM) with an Equal Weight rating and $270 price target. The analyst stated that while he has long been positive on the company's Zoom Video and Phone offerings, the debate around revenue and billings trajectory gives him pause in recommending the stock. MacWilliams added that the road ahead gets tougher for Zoom Video with declining new customer additions, encroaching competition from Microsoft (MSFT) and Google (GOOGL), and difficult compares incoming.
'HUMP ON VALUATION': Barclays analyst Ryan MacWilliams initiated coverage of Twilio (TWLO) with an Equal Weight rating and $375 price target. The analyst noted that the company is leading the way in the CPaaS market with "the most innovation in the space," while its competitors are still falling far behind it in terms of developer penetration and breadth of platform. MacWilliams, however, cannot get over the "hump on valuation" at enterprise value to expected 2023 gross profit ratio of 24-times.
BUY SQUARESPACE: Truist analyst Naved Khan initiated coverage of Squarespace (SQSP) with a Buy rating and $50 price target. The analyst noted that the company's platform allows small business customers to easily and quickly create websites and online stores, while its fully-integrated offering includes website building templates, domains, e-commerce plans and advertising/marketing capabilities. Khan argued that the rising brand awareness, growing user base, strength in commerce, and tuck-in M&A should allow Squarespace to grow at a 14% CAGR over the next nine years.
UPCOMING DECELERATION: RBC Capital analyst Brad Erickson downgraded Wix.com (WIX) to Sector Perform from Outperform with a price target of $210, down from $270. The analyst cited his checks with SMB-focused web design agencies that suggest "less improvement from the summertime hyperseasonality," along with the combination of slowing new digital business formation. Despite remaining positive on Wix.com opportunity and high-quality management team, the analyst says his downgrade is based on the expected upcoming deceleration and the unlikely near/medium-term e-commerce upside.
MODERATING GROWTH: Summit Insights analyst Kinngai Chan downgraded Lam Research (LRCX) to Hold from Buy. The analyst noted that while increased capital intensity should drive higher customer spending in the longer-term term, there is a more conservative memory spending scenario playing out as memory players reset their product roadmaps due to reduced demand in the PC and smartphone end-markets. As such, Chan sees a moderating growth scenario into 2022 for Lam due to the higher probability of a weaker than expected memory spend.
Zoom Video
-0.56 (-0.20%)
Twilio
+0.52 (+0.14%)
Squarespace
+0.42 (+1.07%)
Wix.com
-2.94 (-1.49%)
Lam Research
-27.07 (-4.78%)
Microsoft
+0.31 (+0.10%)
Alphabet
-6.99 (-0.25%)
Alphabet
-8.67 (-0.31%)