RBC Raises Price Targets on 3 Top Mobile and Cloud Tech Stocks

By Lee Jackson Published May 11, 10:10AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

At this point, it is almost a given that eventually everything from data to video to music files will be stored in the cloud. The companies that specialize in that growing sector could be poised for years for steady growth. A new research note from RBC offers a wrap up of the firm’s Mobile & Cloud investors day in Boston.

The RBC team came away from the event bullish on the top stocks in the sector, and they raised price targets on three top stocks they have rated Outperform.

Amdocs

This is a customer management software company. Amdocs Ltd. (NYSE: DOX) provides billing and customer relationship management software and services for communications, media and entertainment industry service providers worldwide. With revenue of $3.6 billion in fiscal 2014, Amdocs has more than 22,000 employees who serve customers in over 80 countries.

The RBC report indicated the company sees carrier consolidation as a market positive in the longer term. They also point out the company has strong visibility and revenues coverage generating an outstanding $600 million in free-cash-flow a year. They think the company can continue growing this business organically and through additional acquisitions. We recently cited the company as a possible takeover candidate as well.

Amdocs investors are paid a 1.26% dividend. The RBC price target for the stock is raised to $62 from $59. The Thomson/First Call consensus price target is $58. The shares closed Friday at $53.86.

ALSO READ: 10 Reasons Why Everything in the World Is About to Change

F5 Networks

This company provides solutions for an application world. F5 Networks Inc. (NASDAQ: FFIV) helps organizations seamlessly scale cloud, data center, telecommunications and software-defined networking (SDN) deployments to successfully deliver applications and services to anyone, anywhere, at any time. F5 solutions broaden the reach of IT through an open, extensible framework and a rich partner ecosystem of leading technology and orchestration vendors. This approach lets customers pursue the infrastructure model that best fits their needs over time.

With new CEO Manny Rivelo replacing the very popular John McAdam, who will remain as the chairman of the board, the RBC team is interested in the mid to longer term plans for the company. They point out that Rivelo was chosen from within the company, so the status quo should remain. Again, security is helping to drive revenues as the company gains share from rivals.

The RBC price target for this top stock is raised from $138 to $143, and the consensus target is $130.97. The stock closed Friday at $126.05.

Radware

Radware Ltd. (NASDAQ: RDWR) is a global leader of application delivery and application security solutions for virtual, cloud and software defined data centers. Its award-winning solutions portfolio delivers service level assurance for business-critical applications, while maximizing IT efficiency. Radware’s solutions empower more than 10,000 enterprise and carrier customers worldwide to adapt to market challenges quickly, maintain business continuity and achieve maximum productivity while keeping costs down.

The company recently posted solid earnings and announced a new share repurchase plan allowing the repurchase of up to $40 million of ordinary shares. The RBC team is bullish on the company, as the on-premise/subscription platform is resulting in gross margins of an astonishing 83%.

The RBC price target for the stock, which is rated Outperform/Speculative Risk, is raised $26 to $29, and the consensus target is set at $27.38. The shares closed Friday at $23.

ALSO READ: Analyst Says Bull Market Will Not End With Top Tech Stocks So Cheap

Aggressive accounts should have a position in this top growing technology segment. Demand continues to grow, as do safety and security concerns. The top stocks will be afforded rich multiples as earnings can grow consistently higher.

About the Author Lee Jackson →

Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad and diverse career, which included a stint as the creative services director at the NBC affiliate in Austin, Texas, gives him unique insight into the financial industry and world.

Lee Jackson's journey in the financial industry spans over 30 years, with nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career was marked by his presence on the sell side during pivotal Wall Street events, from the dot.com rise and bubble to the Long Term Capital Management debacle, 9/11, and the Great Recession of 2008. This is a testament to his resilience and adaptability in the face of market volatility.

Lee Jackson’s practical financial industry experience, acquired from a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing on various platforms. This unique combination allows him to shed light on the intricacies and workings of Wall Street in a way that only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.

Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.