5 Tech Stocks With Very Positive Earnings Revisions

By Lee Jackson Updated Jun 4, 10:41AM EDT · Published Jun 4, 9:05AM EDT

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Earnings are always the main driver for stock prices. But right after what is presented during earnings season in importance are earnings revisions. When earnings estimates are revised higher, then the road forward always looks a little better. In a new report, the technology team at UBS highlight five stocks with the most positive earnings-per-share revisions in the most recent quarter.

While technology continues to have a solid year, with the sector up almost 7.73% through last week, the overall earnings have been mixed. As investors are well aware, missing earnings and revising forward estimates lower is the twin knockout for stocks. The following five stocks from the UBS report had positive earnings revisions.

FireEye

This is one of the fastest growing security software companies. FireEye Inc. (NASDAQ: FEYE) garnered 30% of the advanced persistent threat category, and other Wall Street analysts are very bullish on the prospects. The company held a widely anticipated analyst day this week, and from all reports, the senior management was very positive about the future. Takeover chatter surrounds the stock, and it would not be surprising to eventually see a mega-cap tech stock take a run at it.

Earlier this year, FireEye announced the new release of FireEye Email Threat Prevention Cloud that adds the traditional email security features of anti-spam and antivirus protection to its advanced threat detection capabilities.

FireEye announced recently a huge partnership with tech giant Hewlett-Packard to develop an advanced suite of network threat detection and analysis software. The two companies said they will develop an industry standard architecture for providing customers with “a blueprint” for threat protection.

UBS rates the stock at Buy with a $50 price target. The Thomson/First Call consensus price target is $47.70. Shares closed Wednesday at $47.69.

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MicroStrategy

This company has continued to post outstanding earnings. MicroStrategy Inc. (NASDAQ: MSTR) is a leading worldwide provider of enterprise software platforms. The company’s main business goal is to provide enterprise analytics, mobility and security platforms that are flexible, powerful, scalable and user-friendly.

The company recently released MicroStrategy 10, in which for the first time MicroStrategy’s analytics platform marries enterprise analytics, mobility and security with the flexibility and ease of use desired by many business users today. MicroStrategy 10 satisfies the needs and requirements of many information technology (IT) departments, and the company thinks that business users will enjoy this powerful and very agile solution.

The consensus price target is posted at $205.75. The stock closed Wednesday at $177.80 per share.
SAP

This top European company bought Concur Technologies back in January, and it may be on the prowl for more additions. SAP S.E. (NYSE: SAP) provides application and analytics software and software-related services for enterprises worldwide. The company offers solutions covering various lines of businesses, including asset management, commerce, finance, human resources, manufacturing, marketing, sales, service, sourcing and procurement, supply chain and sustainability, as well as research and development, and engineering.

With almost 75,000 employees worldwide, SAP is regarded as one of the foremost application and software companies today. Some have speculated that the company may be looking to acquire a customer relationship management software company to strengthen what is already one of the most formidable product line-ups in the technology arena.

SAP investors are paid a 1.6% dividend. The consensus price objective is $71.32. Shares closed above that mark on Wednesday at $75.66.

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Splunk

Splunk Inc. (NASDAQ: SPLK) appears to be on the rise with many on Wall Street, and some of the retailer survey data gives a good indication why. A very large 26% of the resellers surveyed believe the company is the best positioned in the sector to capitalize on customer interest in security analytics, an area that could price to be gigantic in the years to come.

The company provides the leading software platform for real-time operational intelligence. Splunk software and cloud services enable organizations to search, monitor, analyze and visualize machine-generated big data coming from websites, applications, servers, networks, sensors and mobile devices. This helps when looking for true security issues and false alarms, among other things.

The UBS rating is Buy, with an $82 target. The consensus target is posted at $79.97. The shares closed Wednesday at $66.78

Workday

This is another stock that momentum traders have set sail on and the volatility has been a roller-coaster for shareholders. Workday Inc. (NYSE: WDAY) is a leading provider of enterprise cloud applications for finance and human resources. Workday delivers financial management, human capital management and analytics applications designed for the world’s largest companies, educational institutions and government agencies.

Many Wall Street analysts feel that the cloud has emerged as the future state for many large enterprises, a fact that should continue to broaden the channel of available business opportunities for Workday.

Despite reporting better-than-expected earnings, the company got drilled when total billings growth moderated to 31% in the quarter. Sales rose 57% from a year ago to $251 million, and the recent drubbing of the stock gives investors an outstanding entry point.

The UBS rates the stock a Buy with a $116 target, while the consensus price objective is $100.88. Shares closed most recently at $80.65.

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Stocks with positive earnings revisions are the ones that at least have a little clearance for the road ahead. While all these stocks are among the leaders in the categories, they are more suited for aggressive growth accounts.

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.