Analysts Stocks

      Daily Update - May 2, 2023

      Selected stock price target highlights of the day

      By Matthew Otto

      VRTX

      Vertex Pharmaceuticals’ product revenue for the first quarter of 2023 was $2.37 billion, which represents a 13% increase compared to the first quarter of 2022. The revenue growth was primarily driven by the strong uptake of TRIKAFTA/KAFTRIO in multiple countries internationally and continued performance of TRIKAFTA in the U.S.

      In the first quarter of 2023, net product revenue increased by 3% to $1.40 billion in the U.S. and increased by 33% to $971 million outside the U.S. Vertex’s full-year 2023 financial guidance includes CF product revenue guidance of $9.55 to $9.7 billion, which includes expectations for continued performance of TRIKAFTA in ages 6+ and the launch of TRIKAFTA in the 2-5 age group, as well as continued uptake of KAFTRIO/TRIKAFTA in ages 6+ in countries outside the U.S., including those with recent reimbursement agreements.

      Wall Street Action

      • Stifel analyst Paul Matteis upgraded Vertex Pharmaceuticals to a Hold rating and raised the price target from $300 to $340.
      • Guggenheim analyst Debjit Chattopadhyay reiterated a Buy rating and increased his price target from $339 to $385.
      • Baird analyst Brian Skorney sustained a Neutral rating but raised the price target from $280 to $325.
      • Oppenheimer analyst Hartaj Singh affirmed an Outperform rating and boosted the price target from $350 to $410.
      • HC Wainwright analyst Andrew Fein upheld a Buy rating and lifted the price target from $326 to $380.
      • Barclays analyst Gena Wang reiterated an Overweight rating and elevated the price target from $342 to $384.
      • JPMorgan analyst Jessica Fye raised the price target to $345 while maintaining a rating.
      • Truist Securities analyst Robyn Karnauskas upgraded the price target from $342 to $456 while maintaining a rating.
      • RBC Capital analyst Brian Abrahams raised the price target from $299 to $315 while keeping a Sector rating.
      • Morgan Stanley analyst Matthew Harrison retained an Equal-Weight rating but increased the price target from $285 to $305.

      Looking at the price target chart at AnaChart we can see that Vertex is carrying a positive momentum from 2022 into 2023 with Matthew Harrison (MORGAN STANLEY) having success with his stock forecasts timing while Jasper Hellweg (ARGUS) remains bearish.

      CHGG

      Chegg, the student-first connected learning platform, reported a 7% year-over-year decrease in total net revenues, which amounted to $187.6 million for the first quarter of 2023. Subscription Services revenues declined 3% year-over-year to $168.4 million, accounting for 90% of total net revenues. Chegg’s net income was $2.2 million, while non-GAAP net income was $38.1 million, and adjusted EBITDA was $57.6 million. Chegg also had 5.1 million Subscription Services subscribers, which represents a 5% year-over-year decrease.

      CEO & President of Chegg, Inc., Dan Rosensweig, stated that the company is embracing AI technology aggressively and prioritizing investments to take advantage of advancements in AI for the benefit of students. CheggMate is the first big step in the incorporation of AI, and the company recently announced it in collaboration with OpenAI. It will use ChatGPT, Chegg’s proprietary data, and subject matter experts to make learning more personalized, adaptive, accurate, fast, and effective in an easy-to-use and conversational manner. CheggMate aims to be a powerful and distinctive learning tool, offered exclusively by Chegg.

      Chegg CFO, Andy Brown, reported that Q1 was a solid quarter, with total revenue of $188 million driven by Subscription Services revenue of $168 million, and free cash flow of $56 million, the result of strong operating performance and higher interest rates. Chegg ended the quarter with $1.2 billion in cash and investments. Only an outlook for the next quarter was provided.

      Chegg’s study aide tailored to students’ needs, which utilizes ChatGPT’s AI technology, is expected to launch soon, but it remains unclear if it will be enough to counter the slowdown in the company’s core business. Chegg targeted second-quarter total revenue between $175 million and $178 million, which fell short of Wall Street expectations of $186.3 million.

       

      Wall Street Action

      • Craig-Hallum analyst Alex Fuhrman maintains a Buy rating and lowers the price target from $25 to $18.
      • Morgan Stanley analyst Josh Baer reaffirms an Equal-Weight rating and lowers the price target from $18 to $12.
      • Jefferies analyst Brent Thill downgrades Chegg from Buy to Hold and lowers the price target from $25 to $11.
      • Piper Sandler analyst Arvind Ramnani maintains a Neutral rating and lowers the price target from $17 to $11.
      • Goldman Sachs analyst Eric Sheridan lowers the price target from $18 to $14 and maintains a Neutral rating.
      • JPMorgan analyst Doug Anmuth lowers the price target to $14 from $18 and maintains a Neutral rating.

      Looking at the price target chart at AnaChart we see that although Chegg lost 80% of its market value since 2022, there isn’t a single analyst who kept his price target below the stock price prior to earning release.

      JPM

      Following yesterday’s news about JP Morgan purchase of First Republic Bank we see Wall Street reaction.

      • RBC Capital analyst Gerard Cassidy maintains an Outperform rating and raises the price target from $140 to $147.
      • Oppenheimer analyst Chris Kotowski keeps an Outperform rating and raises the price target from $192 to $196.
      • Credit Suisse analyst Susan Roth Katzke reiterates an Outperform rating and maintains a $160 price target.
      • BMO Capital analyst James Fotheringham raises the price target to $170.

      All the analysts that are covering the stock have their price target above the stock price with Chris Kotowski (OPPENHEIMER) has the street high on JP Morgan Chase at $196.

      ZI

      ZoomInfo reported its financial results for the first quarter ended March 31, 2023.

      The company’s GAAP revenue for the quarter was $300.7 million, a 24% increase year-over-year, and the GAAP operating margin was 22%, with an adjusted operating income margin of 40%.

      ZoomInfo generated cash flow from operations of $108.6 million and unlevered free cash flow of $121.1 million. The company incorporated Engage natively within SalesOS, announced the integration of generative AI into its go-to-market (GTM) plays, and published its 2022 sustainability report.

      The company also completed a repricing of its First Lien Credit Agreement, repurchased 1,058,291 shares of Common Stock, and ended the quarter with 1,905 customers with $100,000 or greater in annual contract value.

      Outlook

      For the second quarter of 2023, the company expects GAAP revenue of $310-312 million, Non-GAAP Adjusted Operating Income of $125-127 million, and Non-GAAP Adjusted Net Income per share of $0.22-0.23. For full-year 2023, ZoomInfo expects GAAP revenue of $1.275-1.285 billion, Non-GAAP Adjusted Operating Income of $523-533 million, and Non-GAAP Adjusted Net Income per share of $0.99-1.01.

      Wall Street Action

      • RBC Capital analyst Rishi Jaluria reiterates an Outperform rating and maintains a $30 price target.
      • BAML analyst Koji Ikeda maintains a Neutral rating and lowers the price target from $30 to $28.
      • Stifel analyst Parker Lane affirms a Buy rating and downgrades the price target from $34 to $30.
      • Canaccord Genuity analyst David Hynes keeps a Buy rating and lowers the price target from $35 to $32.
      • Credit Suisse analyst Richard Hill continues to rate ZoomInfo Technologies as Outperform and lowers the price target from $40 to $32.
      • Wells Fargo analyst Michael Turrin maintains an Overweight rating and reduces the price target from $40 to $34.
      • Raymond James analyst Brian Peterson holds an Outperform rating and drops the price target from $33 to $28.
      • Deutsche Bank analyst Brad Zelnick holds a Buy rating and reduces the price target from $34 to $31.
      • Piper Sandler analyst Brent Bracelin sustains an Overweight rating and lowers the price target from $32 to $30.
      • UBS analyst Jennifer Swanson Lowe decreases the price target to $27.
      • JPMorgan analyst Mark Murphy decreases the price target to $31.

      Although ZoomInfo Technologies stock lost two thirds of its market value since November 2021 not a single analyst has has a sell rating nor their price target below the stock price.

      Above is a snapshot of the top daily stock price target moves on AnaChart