After every week of tech earnings outcomes that fueled a market acquire, there are nonetheless loads of prime shares to purchase within the sector forward of revenue stories, in keeping with Morgan Stanley. The agency named a slew of firms which have main upside heading into quarterly outcomes. CNBC Professional combed via prime Wall Road analysis to seek out extra must-own tech shares heading into earnings. They embrace: Palo Alto , Docebo, R1 RCM, Tenable and Flywire. Flywire The worldwide cost tech community has one of many “most compelling” danger/rewards round, the agency says. Analyst James Faucette upgraded the inventory earlier this week to obese from equal weight saying that income development issues are overdone. “FLYW is accelerating the pace and size of new client signings which should drive higher levels of net new contribution vs. historical trends,” he stated. Faucette urged traders to stay calm including that the market has development deceleration fears all flawed. “In fact, our base case growth assumption could prove conservative given it implies a lower than historical level of net new customer contribution a growth component that we think is primed for acceleration next, ” he stated The inventory is down 4% this 12 months, however Faucette says shares might be due for a re-rating if development continues to stay elevated. Flywire can be on account of report fourth-quarter earnings in late February. Palo Alto Networks Analyst Hamza Fodderwala stated the agency’s current safety checks present cyber threats stay a prime precedence for IT. That bodes effectively for Palo Alto in 2024 and past, in keeping with Fodderwala. The agency says it sees an extended runway for development for the cyber firm as its aggressive positioning stays strong, he wrote. Additional, Palo Alto is healthier positioned for AI than traders consider, Fodderwala added. “With large unique data sets and market leadership across multiple major security categories, we think PANW is best positioned among the pure-play security vendors to deliver AI-driven security automation,” he stated. In the meantime shares of the corporate are up . however the inventory nonetheless stays extraordinarily enticing, the agency says. “We are doubling down on PANW as our Top Pick given share gain across multiple security categories and growing AI tailwinds from a broader platform,” he wrote. Palo Alto is scheduled to report earnings in late February. R1 RCM The medical expertise firm was lately named a prime decide by analyst Craig Hettenbach. Shares of the corporate , however Hettenbach says the inventory is severely undervalued. “Investors are over extrapolating recent negatives, failing to give RCM credit for a stronger foundation established in the business over the last few years,” he stated within the observe. Hettenbach says the enterprise has improved since proper earlier than the pandemic started. “We emphasize increased diversification, higher margins and technology/AI optionality, along with positive feedback from a customer check,” he added. However investor skepticism stays leaving Hettenbach to pound the desk for RCM shares. The agency say new administration has the corporate heading in the right direction with a combination or development and free “We are Overweight RCM following recent underperformance in the stock,” he stated succinctly. The corporate is because of report quarterly earnings in late February. Docebo “DCBO is at forefront of innovation in Corporate Learning, with a competitive moat & strong positioning to monetize AI via direct products, upsell to higher priced plans & indirect platform benefits. … .With a vision to transform corporate learning and skilling from off-shelf, static content and learning pathways to hyper personalized learning experiences, we believe Docebo is leading the charge with respect to innovation in the enterprise learning market.” Flywire “Most Compelling Risk-Reward in SMID-Cap Fintech. … .FLYW is accelerating the pace and size of new client signings which should drive higher levels of net new contribution vs. historical trends. … .In fact, our base case growth assumption could prove conservative given it implies a lower than historical level of net new customer contribution a growth component that we think is primed for acceleration next year.” R1 RCM “Investors are over extrapolating recent negatives, failing to give RCM credit for a stronger foundation established in the business over the last few years. … .We emphasize increased diversification, higher margins and technology/AI optionality, along with positive feedback from a customer check. … .We are Overweight RCM following recent underperformance in the stock.” Palo Alto Networks “We are doubling down on PANW as our Top Pick given share gain across multiple security categories and growing AI tailwinds from a broader platform. …. .With large unique data sets and market leadership across multiple major security categories, we think PANW is best positioned among the pure-play security vendors to deliver AI-driven security automation.” Tenable Holdings “TENB remains the category leader within its core Vulnerability Management endmarket, but continues to trade at a discount to peers. After underperforming Security peers throughout 2023 on the back of slowing growth, we see opportunity in the recent dislocation in TENB shares vs. Security peers, and point to our above-consensus outlook for a > 28% FCF CAGR through 2025 as reason for optimism as the company pushes towards its long-term targets of 25%+ operating margins and 30%+ FCF margins.”
