The stock market has been suffering violent price swings amid the Federal Reserve’s tightening monetary policy, supply chain disruption, high oil prices, and concerns over the possibility of an economic slowdown. However, according to the Commerce Department, the consumer price index (CPI) rose 4.9% in April from a year ago, signaling that price pressures could be easing slightly.
Also, quality retail earnings dominated investor sentiment and stocks posted substantial gains last week, ending seven-week losing streaks for the S&P 500 and Nasdaq Composite and an eight-week slide for the Dow Jones Industrial Average. While explaining the veteran chartist Larry Williams’ analysis, Jim Carmer said, “Larry Williams perfectly called the bottom the week before last. Now his analysis suggests we have got a lot more room to run.”
Against this backdrop, we think it could be wise to add the stocks of quality mid-cap companies SentinelOne, Inc. (S), MongoDB, Inc. (MDB), Cloudflare, Inc. (NET), and RingCentral, Inc. (RNG) to one’s watch list because Wall Street analysts expect these stocks to soar by more than 70% in price in the near term.
SentinelOne, Inc. (S)
Mountain View, Calif.-based cybersecurity provider S’ Singularity Platform delivers artificial intelligence (AI)-powered autonomous threat prevention, detection, and response capabilities across an organization's endpoints and cloud workloads, enabling seamless and automatic protection against a spectrum of cyber threats. The company has a market capitalization of $6.63 billion.
On May 4, 2022, S announced that it had acquired Attivo Networks. With the acquisition, the company intends to extend Singularity XDR’s capabilities to identity-based threats across endpoint, cloud workloads, IoT devices, mobile, and data wherever it resides, setting the standard for XDR and accelerating enterprise zero trust adoption.
S’ net revenue increased 295% year-over-year to $65.60 million for its fiscal fourth quarter, ended Jan. 31, 2022. The company’s annualized recurring revenue grew 123% year-over-year to $292.39 million. Also, its total assets came in at $2.04 billion, up 292.3% year-over-year.
For its fiscal quarter ending July 31, 2022, analysts expect S’ EPS and revenue to increase 44.7% and 85.5%, respectively, year-over-year. Wall Street analysts expect the stock to hit $43.87 in the near term, which indicates a potential upside of 84.4%.
Click here to checkout our Cybersecurity Industry Report for 2022
MongoDB, Inc. (MDB)
New York City-based MDB provides a general-purpose database platform worldwide and has a market capitalization of $16.14 billion. The company offers MongoDB Enterprise Advanced, a commercial database server for enterprise customers to run in the cloud, on-premises, or in a hybrid environment. Its offerings also include MongoDB Atlas, a hosted multi-cloud database-as-a-service solution.
On April 12, 2022, MDB announced the launch of a pay-as-you-go MongoDB Atlas offering, which can be launched directly from the Google Console. The offering provides developers with a simplified subscription experience and enterprises more choice in procuring MongoDB on Google Cloud, thereby increasing the demand for its solution.
MDB’s net revenue increased 56% year-over-year to $266.50 million for its fiscal fourth quarter, ended Jan. 31, 2022. The company’s non-GAAP gross profit grew 59.5% year-over-year to $196.61 million. Also, its total assets came in at $2.45 billion, up 74% year-over-year. Its revenue and total assets have increased at CAGRs of 48.5% and 49.5%, respectively, over the past three years.
MDB’s EPS is expected to be $0.15 in its fiscal 2024, representing a 140.5% year-over-year increase. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters. Also, the company’s revenue is expected to increase 35.1% year-over-year to $1.18 billion in its fiscal 2023. Wall Street analysts expect the stock to hit $415 in the near term, which indicates a potential upside of 75%.
Cloudflare, Inc. (NET)
NET operates a cloud platform that delivers a range of network services to businesses worldwide. The San Francisco company provides an integrated cloud-based security solution to secure a range of media combinations. It has a market capitalization of $18.27 billion.
On Feb. 11, 2022, NET announced that it had acquired Vectrix, which provides businesses with one-click visibility and control across their SaaS applications. The acquisition adds modern cloud access security broker functionality to the company’s industry-leading Zero Trust platform, which could further increase its demand.
NET’s revenue increased 54% year-over-year to $212.20 million for its fiscal first quarter, ended March 31, 2022. The company’s non-GAAP net income came in at $3.50 million, compared to a $9.30 million loss in the year-ago period. Its non-GAAP EPS came in at $0.01 compared to a $0.03 loss in the prior-year quarter. Its revenue and total assets have increased at CAGRs of 50.9% and 99.7%, respectively, over the past three years.
Analysts expect NET’s EPS to increase 200% year-over-year to $0.09 in fiscal 2023. Its revenue is expected to grow 46% year-over-year to $958.40 million in fiscal 2022. Wall Street analysts expect the stock to hit $101.64 in the near term, which indicates a potential upside of 81.5%.
Click here to check out our Cloud Computing Industry Report for 2022
RingCentral, Inc. (RNG)
With a market capitalization of $5.99 billion, San Mateo, Calif.-based RNG provides software-as-a-service solutions that enable businesses to communicate, collaborate, and connect in North America. The company offers business cloud communications and contact center solutions based on its Message Video Phone platform. It has strategic partnerships with Alcatel-Lucent Enterprise and Vodafone Business.
On May 9, 2022, Vlad Shmunis, RNG’s founder, chairman, and CEO said, “With our industry leadership position, unique partner ecosystem, and most importantly, our great people, I am very optimistic about the future for RingCentral."
RNG’s net revenue increased 295% year-over-year to $468 million for its fiscal first quarter ended March 31, 2022. The company’s non-GAAP operating income grew 48.5% year-over-year to $49 million. Also, its EPS came in at $0.39, up 44.4% year-over-year. And its revenue and total assets have increased at CAGRs of 33.1% and 38.5%, respectively, over the past three years.
For its fiscal 2022, analysts expect RNG’s EPS and revenue to increase 38.1% and 25.9%, respectively, year-over-year to $1.85 and $2.01 billion, respectively. In addition, it surpassed the Street EPS estimates in each of the trailing four quarters. Wall Street analysts expect the stock to hit $118.26 in the near term, which indicates a potential upside of 87.3%.
What To Do Next?
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S shares were trading at $23.90 per share on Wednesday afternoon, up $0.11 (+0.46%). Year-to-date, S has declined -52.66%, versus a -13.89% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.
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