SSpeculative tech stocks have been crushed over the past year, with even the most exciting hyper-growth stocks now down more than 50% from their highs. As rate-fueled selling pressure on speculative and unprofitable growth companies continues into the second half, bearish buyers could continue to take a beating.
Although many fallen tech stocks will never see their highs again, various tech companies are more than capable of recovering. Not all hyper-growth businesses are built equal. Some have what it takes to grow during a recession while making efforts to improve profitability prospects.
In this article, we used TipRanks’ comparison tool to examine three innovative big data companies that Wall Street is bullish on.
Snowflake is a data lake and data warehousing company that continues to receive upgrades despite the recent barrage of negative momentum. The stock lost about 74% of its value from peak to peak before bullish analysts sent the shares back towards $150 per share.
Amid the latest round of selling, Snowflake stock is back on the descent, now near the $144 mark on hardly any news. While the stock has the propensity to amplify moves made by the broader Nasdaq 100, it’s worth noting that the company continues to improve its offering.
CIOs love Snowflake and expect to spend an increasing share of corporate IT budgets on its use over time. This speaks to the quality of Snowflake’s technologies.
J. P. Morgan (JPM) went so far as to say that Snowflake is in “elite territory”. How elite? Perhaps Snowflake could weather the coming economic blizzard better than other ventures in the company.
Looking ahead, Snowflake is looking to make a big splash in cybersecurity, with a new workload that can uncover potential threats in massive datasets. Snowflake’s cybersecurity workload is very intriguing and could give it an edge over its main rival Databricks.
At more than 32 times sales, Snowflake stock remains incredibly expensive. However, margin trends are encouraging, as is the company’s cash flow trajectory. As one of the few companies that can sustain hyper-growth while improving profitability prospects, Snowflake is probably more than worthy of such a multiple in the sky.
Wall Street is incredibly bullish based on 23 buy, five hold and one sell rating assigned over the past three months, giving it a strong buy rating. Snowflake’s average price target is $193.72, implying 34% upside potential.
Datadog is another big data company that helps businesses unlock the full power of their datasets. The company’s real-time data monitoring platform makes it easy for companies to generate in-depth analytics across the entire stack. While the macroeconomic headwinds ahead may weigh on growth, I believe such a potential growth slide is more of a road accident than a sustained downturn in Datadog’s growth engine.
It’s not just data monitoring and analysis where Datadog can shine. The company is also looking to create a beautiful ecosystem in other verticals. Like Snowflake, Datadog is hungry for advancements in security. More recently, the company launched Audit Trail, its compliance and governance offering that might be popular with existing customers.
Datadog is a great player in the FSMA (full-stack monitoring and analysis) niche market. Although the company is relatively small ($31.8 billion market cap), with deep-pocketed rivals, it’s not an underdog (pardon the pun) as IT spending continues to remain robust. due to the long-term digital transformation.
At 26.6 times sales, DDOG stock is not cheap. However, in this market you still have to pay for premium growth.
Wall Street is backing the stock, with a strong buy rating based on 18 buys and two holds. Datadog’s average price target of $165.11 implies an upside of 63.4%.
MongoDB is another expensive big data game that may not be as expensive as it looks, given its high-quality growth prospects and ability to achieve profitability in the future.
The scalable general-purpose database company is trading at about 19 times editorial sales. Analysts have slowly lowered their price targets in recent weeks, but the stock continues to be viewed in a positive light by the analyst community. At the time of writing, the shares are down more than 55% from their highs.
Despite cutting-edge innovations, investors have soured on the $18.3 billion company as it still puts its foot on the accelerator to trigger maximum sales growth, even at the cost of bigger losses in the medium term. .
MongoDB is well on its way to taking part in the database scene. However, there is still a long way to go when it comes to challenging the incumbents of the enterprise database scene.
In early June, MongoDB flexed its muscles at its global conference. Many were impressed with the innovations, which could help take the company’s growth to the next level. MongoDB still has its disruptive hat on, but with minimal evidence of a sustained surge in profitability on the horizon, investors could downgrade the stock for longer.
Wall Street is bullish on the name, with MongoDB’s average price target of $377.00 implying 36.2% upside potential. In the last three months, 14 buys, three reservations and one sell rating have been assigned for a moderate buy consensus rating.
Big data stocks have been battered lately, but analysts are bullish on these companies in particular. Currently, analysts seem the most optimistic about Datadog.
While price target downgrades may continue to pour in, I believe the next three big datasets will rise again, perhaps faster than most other hyper-growth disruptors that have seen the their stock prices disappear.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.