Analysts Stocks

      Daily Update - May 8, 2023

      Selected stock price target highlights of the day

      By Matthew Otto

       

      DKNG

      DraftKings reported impressive first-quarter results on Thursday, with revenues of $769.65 million, significantly higher than analysts’ estimate of $704.3 million and well above the $417.21 million recorded in the same period last year. The sports betting company also posted a narrower adjusted loss of 51 cents per share for the quarter, better than analysts’ forecast of a 70-cent loss and an improvement from the 74-cent loss in the year-ago quarter.

      Furthermore, the company has increased its outlook for fiscal year 2023, projecting full-year revenue between $3.135 billion and $3.235 billion, up from a prior range of $2.85 billion to $3.05 billion. The improved forecast is attributed to stronger customer retention and engagement, among other factors. DraftKings has also revised its full-year forecast for adjusted EBITDA to a loss of $290 million to $340 million, down from a previous loss range of $350 million to $450 million.

      Wall Street Action

      • Needham analyst Bernie McTernan praised the company’s recent performance, stating that it provides “encouraging data points for the future profitability of the enterprise.” He believes the legislative environment is supportive of greater market access and maintains a Buy rating and $28 price target on the shares. DraftKings is currently live with mobile sports betting in 21 states and expects positive Adjusted EBITDA for the full-year 2024, given the positive legalization trends.
      • Stifel analyst Jeffrey Stantial referred to DraftKings’ guidance as possibly conservative, which could position the company for a steady beat-and-raise story. However, he noted that profitability might still be several quarters away. Stantial also expressed concerns about potential market share constricting as DraftKings adjusts its customer acquisition spending and competitors such as Fanatics and Bet 365 establish their presence in the United States. Consequently, he maintained his Hold rating and $23 price target on the company’s stock.
      • Roth Capital analyst Edward Engel maintains a Sell rating but upgrades the price target from $15 to $18.
      • Truist Securities analyst Barry Jonas maintains a Hold rating and lifts the price target from $23 to $26.
      • JMP Securities analyst Jordan Bender keeps a Market Outperform rating and raises the price target from $26 to $29.
      • Wells Fargo analyst Daniel Politzer has an Equal-Weight rating and raises the price target from $22 to $24.
      • Canaccord Genuity analyst Michael Graham maintains a Buy rating and moves the price target from $30 to $34.
      • TD Cowen analyst Stephen Glagola reiterates an Outperform rating and lifts the price target from $27 to $30.
      • Barclays analyst Brandt Montour sustains an Equal-Weight rating and raises the price target from $23 to $24.
      • Deutsche Bank analyst Carlo Santarelli maintains a Hold rating and raises the price target from $15 to $22.
      • Benchmark analyst Mike Hickey keeps a Buy rating and raises the price target from $23 to $26.
      • CFRA analyst Zachary Warring downgrades DraftKings from Buy to Hold and upgrades his price target from $25 to $28.
      • Credit Suisse analyst Ben Chaiken raises the price target to $39.

      Looking at AnaChart we see that DraftKings is traded at a third from its value two years ago yet most analysts are optimistic on the stock besides few analysts such as Stephen Grambling from Goldman and Ed Engel from Roth

      ZS

      Zscaler provided an early preview this morning of its Q3 fiscal results and raised its financial forecasts for the full fiscal year. Based on a preliminary review, Zscaler expects Q3 revenue to be between $415 million and $419 million, surpassing its previous estimate of $396 million to $398 million, as well as the consensus forecast of $397.4 million among analysts surveyed by FactSet.

      For the full year, Zscaler raised the lower end of its calculated billings forecast to a range of $1.97 billion to $1.974 billion, up from $1.935 billion. The company also increased its revenue expectations for the full year ending in July to be between $1.587 billion and $1.591 billion, higher than the previous estimate of up to $1.563 billion. Income from operations: $220 million to $224 million (prior guidance: $213 million to $215 million)

      Chairman and CEO Jay Chaudhry attributes this to the strong ROI of the Zscaler Zero Trust ExchangeTM platform, which resonates with customers in the current challenging macro environment.

      Wall Street Action

      • Needham analyst Alex Henderson maintains a Strong Buy and a $210 price target that he initially provided at the beginning of April.

       

      Looking at AnaChart we see that Zscaler is traded at less than half of its value at the end of 2021, however all analysts that cover the stock carry a positive note with Leering Analyst Sterling Auty at street high of $220.

       

      EPAM

       

      EPAM Systems reported Q1 2023 results and updated its full-year outlook. Q1 2023 highlights include:

      • Revenues of $1.211 billion, up 3.4% YoY
      • GAAP income from operations of 9.9% of revenues, Non-GAAP income from operations of 14.7% of revenues
      • GAAP diluted EPS of $1.73, up 13.8% YoY, Non-GAAP diluted EPS of $2.47, down 0.8% YoY

      For the full year, EPAM now expects:

      • Revenues between $4.950 billion and $5.000 billion
      • GAAP diluted EPS between $8.11 and $8.31
      • Non-GAAP diluted EPS between $10.60 and $10.80

      For Q2 2023, EPAM anticipates:

      • Revenues between $1.195 billion and $1.205 billion
      • GAAP diluted EPS between $1.82 and $1.90
      • Non-GAAP diluted EPS between $2.38 and $2.46

      Wall Street Action

      Several analysts have updated their ratings on EPAM Systems and lowered their price targets:

      • Morgan Stanley analyst James Faucette maintains an Overweight rating yet lowers the price target from $385 to $350.
      • TD Cowen analyst Bryan Bergin keeps a Market Perform rating and drops the price target from $323 to $290.
      • Keybanc analyst Thomas Blakey sustains an Overweight rating and reduces the price target from $424 to $305.
      • Piper Sandler analyst Arvind Ramnani maintains an Overweight rating but lowers the price target from $391 to $289.
      • Needham analyst Mayank Tandon retiatres a Buy rating however drops the price target from $415 to $325.
      • Citi analyst Ashwin Shirvaikar reduces the price target to $310.
      • Barclays analyst Ramsey El-Assal lowers the price target to $310.

      Looking at AnaChart we see that all the analysts covering the stock have their price targets above EPAM stock price. This view is consistent for the last two years while the stock lost half its market value.

      Daily stock Analysts Top Price Moves Snapshot