The tech-heavy Nasdaq edged down in trading on Monday, slipping 0.32% to 8,005, just below Thursday's peak of 8,051 and still within range of its all-time high on May 3 of 8,164. Trading has been volatile in recent weeks, but it's safe to say that we're flirting with record highs.
Therefore, now might be a good time to take a closer look at some stocks with an upbeat outlook for the future. We'll focus on small- to medium-sized tech companies, dipping into the TipRanks data to find out what Wall Street's best analysts are saying.
Security matters, especially online, and businesses will pay for safety. That's the fact behind Proofpoint's (PFPT - Get Report) success. The company offers SaaS solutions for email security, including email encryption and archiving, inbound security, and outbound data loss prevention. It's an important niche, and Proofpoint fills it competently.
Market analysts agree, and Proofpoint has been getting strong reviews for several months now. At the beginning of May, Kirk Materne of Evercore ISI said of the company, "(Proofpoint) continues to evolve towards offering a more complete 'people-centric security' suite."
Proofpoint as the company continues to evolve towards offering a more complete 'people-centric security' suite." He gave PFPT shares a price target of $140, suggesting a 25% upside to the stock.
Five-star analyst Jonathan Ruykhaver from Baird released his notes on Proofpoint earlier this week. He emphasized the importance of Proofpoint's niche to the online security industry, and gave the firm a solid buy rating: "With 90%+ of breaches involving either phishing or exploits leveraging the email attack vector, training employees to identify and behave appropriately when faced with phishing and email borne attacks has never been more important for enterprise cyber safety ... we raise PFPT's price target to $145 and designate shares a Fresh Pick." His target indicates a 29% upside potential to Proofpoint.
Overall, Proofpoint has a strong buy consensus rating, based on 13 buys and three holds assigned in the past three months. The stock's $111 share price and $141 average price target give it an upside potential of 26%.
Square (SQ - Get Report) is a leader in online payment processing. The company offers software and devices allowing merchants to conduct transactions from any smartphone or tablet. Square's reader can run charge cards from a smartphone; Square's Stand converts an iPad into a cash register. It's a clever - and money-saving - idea that has become popular with small businesses. Square also offers a P2P money transfer app, Square Cash, in a direct challenge to PayPal's (PYPL - Get Report) Venmo, and now offers the Square Card, a business card offering sellers quick access to their Square account.
Analyst Dan Dolev, writing from Nomura, recently set a buy rating on SQ shares, pointing out a 10% increase in Square Cash downloads from April to May, and the near-500K download advantage which the app has over Venmo. He gives SQ a price target of $90, and an upside of 23%.
Also bullish on SQ is Ivan Feinseth of Tigress Financial. He sid, "Square's ability to grow its ecosystem will continue to drive its growing return on capital and increasing economic profit." Feinseth pointed specifically to the Square Card and Square Cash as important differentiators between Square and its competition.
With 13 buy ratings and nine holds, Square maintains a moderate from the analyst consensus. SQ shares are selling for $72, so the $85 average price target suggests 17% upside.
Upland (UPLD - Get Report) is another cloud software company, with its particular specialty being enterprise work management. Upland's products include solutions for team collaboration, project management, workflow automation, and customer engagement. Cloud-based SaaS is a crowded business niche, but Upland has proven successful at delivering quality products.
The company's success has been noted by top analysts. Jeff Van Rhee, weighing in from Craig-Hallum, said, "Organic growth, while likely to be volatile in the near term, will see upward pressure in the intermediate term, increasing the likelihood of a re-rate." He boosted his price target on UPLD to $56 from $52, implying an upside to the stock of 19%.
At the same time, Jefferies analyst John Difucci, ranked No. 16 overall in TipRanks' database, initiated coverage on the stock with an even more upbeat price target of $61. Difucci's target suggests a 30% upside for Upland. And earlier in May, Roth analyst Richard Baldry set a $58 price target on UPLD, saying, "The company's rapidly increasing adjusted EBITDA highlights the strength of its strategy, and its superior profitability and proven acquisition strategy should support the stock's valuation."
UPLD shares get a unanimous strong buy analyst consensus, with seven buy ratings over the past three months. Shares sell for $46, and the average price target is $56, giving UPLD a 20% upside potential.