Selected stock price target news of the day - November 1st, 2023

By: Matthew Otto

Paycom Plunge: Beti’s Success Sparks Revenue Concerns

While Paycom reported adjusted earnings that surpassed expectations, its revenue fell short, and the fourth-quarter guidance left investors wanting more. The company anticipates full-year revenue in the range of $1.68 billion to $1.684 billion, below analysts’ estimates of $1.714 billion. Adjusted earnings before interest, tax, depreciation, and amortization were also revised downward to a range of $712 million to $717 million, contributing to analysts’ concerns about the company’s growth prospects.

One of the said contributors to Paycom’s lowered guidance is its flagship product, Beti, described as a do-it-yourself payroll for employees. While Beti has reduced errors and increased efficiency, it has also led to the elimination of certain billable items. William Blair analysts, Matthew Pfau, downgraded the stock to Market Perform from Outperform, citing Beti as the main culprit behind the revised guidance.

Paycom’s fourth-quarter revenue forecast, ranging from $420 million to $425 million, lagged behind analysts’ estimates of $452.3 million. Paycom’s focus on driving automation and self-service payroll, particularly with Beti, has become a double-edged sword, according to Morningstar analyst Emma Williams. Brokerage TD Cowen cautioned that the stock’s trading would likely remain range-bound as investors seek more clarity amid higher uncertainty and lower visibility, advising against recommending shares in the current landscape.

Analysts Adjust Ratings and Lower Price Targets

William Blair analyst Matthew Pfau Downgraded from Outperform to Market Perform.
Citigroup analyst Steven Enders Downgraded from Buy to Neutral and the price target from $360 to $189.
Stifel analyst Brad Reback Lowered from Buy to Hold and the price target from $400 to $160.
TD Cowen analyst Bryan Bergin Lowered from Outperform to Market Perform and the price target from $331 to $202.
Needham analyst Joshua Reilly Downgraded from Buy to Hold.
Keybanc analyst Jason Celino Lowered from Overweight to Sector Weight.
Deutsche Bank analyst Brad Zelnick Downgraded from Buy to Hold and the price target from $400 to $175.
Oppenheimer analyst Brian Schwartz Downgraded from Outperform to Perform.
Piper Sandler analyst Arvind Ramnani Lowered from Overweight to Neutral and the price target from $399 to $185.

Which Analyst has the best track record to show on PAYC?

Analyst Mark Marcon (BAIRD) currently has the highest performing score on PAYC with 6/8 (75%) price target fulfillment ratio. His price targets carry an average of $32.97 (13.32%) potential upside. Paycom Software stock price reaches these price targets on average within 17 days.

AMD’s 3Q Earnings Report Sparks Market Reaction

While the reported third-quarter earnings and revenue of AMD slightly exceeded expectations, the company’s guidance for the fourth quarter fell short. The projected fourth-quarter revenue of $6.1 billion, with a variance of $300 million, sits at the lower end of analysts’ estimates of $6.4 billion. In response to these figures, 15 analysts surveyed by FactSet swiftly lowered their price targets on AMD.

Analysts reveal a mixed sentiment about AMD’s performance. While John Vinh at KeyBanc expressed encouragement over data center results and the outlook for server CPU and GPU lines, concerns about weak embedded and gaming sectors prompted a reduction in the price target from $160 to $140. On the other hand, analysts led by Harsh V. Kumar at Piper Sandler maintained an optimistic stance, maintaining a $150 price target and an Overweight rating. Kumar emphasized that AMD’s growth centers remain intact despite adjustments largely driven by gaming and embedded businesses going through an inventory digestion phase.

Analysts Adjust Ratings as Earnings Impact Investor Sentiment

Mizuho’s Vijay Rakesh Maintained a Buy rating and lowered the price target from $140 to $130.
Barclays’ Blayne Curtis Reiterated an Overweight rating and reduced the price target from $145 to $120.
Wedbush’s Matt Bryson Maintained an Outperform rating and lowered the price target from $155 to $130.
Morgan Stanley’s Joseph Moore Kept an Overweight rating and decreased the price target from $138 to $128.
Raymond James’ Srini Pajjuri Maintained a Strong Buy and lowered price target from $145 to $125.
Keybanc’s John Vinh Reiterated an Overweight rating and reduced the price target from $160 to $140.

Which Analyst has the best track record to show on AMD?

Analyst Christopher Rolland (SUSQUEHANNA) currently has the highest performing score on AMD with 24/30 (80%) price target fulfillment ratio. His price targets carry an average of $9.96 (17.21%) potential upside. Advanced Micro Devices stock price reaches these price targets on average within 209 days.

Freshworks Q3 Earnings, Driven by AI Innovation and Customer Expansion

Freshworks reported its financial performance in the third quarter of 2023, exceeding expectations across key metrics. The company’s revenue for the quarter reached $153.6 million, surpassing the projected financial outlook range. The positive momentum extended to free cash flow, with the company generating $22.1 million in Q3 and improving its free cash flow margin to 14%.

Freshworks showcased its commitment to AI integration, unveiling new generative AI capabilities across products. This includes the introduction of the Customer Service Suite, an all-in-one solution combining bot, modern messaging, and ticketing. The suite gained rapid traction, signing on over 200 customers within the first two months of its launch. In terms of customer expansion, Freshworks reported an increase in the number of customers contributing more than $5,000 in Annual Recurring Revenue. This metric grew by 17% year-over-year to 19,551 customers, representing 88% of the company’s ARR. Additionally, the larger customer cohort, contributing over $50,000 in ARR, witnessed a 32% year-over-year growth. The company’s unique go-to-market strategy, addressing companies of all sizes while targeting larger, higher-yielding customers, was evident in the addition of nearly 1,000 net customers during the quarter, bringing the total customer count to approximately 66,600.

Mixed Analyst Ratings as Price Targets Adjust Amid Market Dynamics

Barclays analyst Raimo Lenschow maintained an Equal-Weight rating and lowered the price target from $25 to $20.
Morgan Stanley analyst Elizabeth Porter maintained an Equal-Weight rating and lowered the price target from $24 to $22.
Needham analyst Scott Berg reiterated a Buy rating and a $25 price target.
Piper Sandler analyst Brent Bracelin reiterated an Overweight rating and a $24 price target.

Which Analyst has the best track record to show on FRSH?

Analyst Raimo Lenschow (BARCLAYS) currently has the highest performing score on FRSH with 3/5 (60%) price target fulfillment ratio. His price targets carry an average of $1.78 (10.80%) potential upside. Freshworks stock price reaches these price targets on average within 166 days.