Upgrades and Downgrades by Wall Street analysts; have upgraded Micron, Insulet, Cheesecake Factory, and Bumble, while downgrading ZoomInfo.
Micron
Baird Upgrades Micron
- Upgraded to Outperform
- Price target: $150
Baird’s Outlook on Micron
- Baird sees significant upside opportunities for Micron, especially amidst the stock’s recent pullback.
- Positive trends in DRAM pricing are emerging, leading to a forecast for memory over the next 12-18 months.
- The shift towards premium-priced DDR5 is a strategic move for Micron’s financial performance and market position.
- The potential of HBM3E, the fastest, highest-capacity high-bandwidth memory for AI innovation, could generate a gross margin exceeding 60% for Micron in the coming year.
- Baird rates Micron as “Outperform,” indicating confidence in its future performance amidst market dynamics.
Micron Stock Reaction:
- Opened regular session at $119.04
- Closed at $120.13
- Gain: 4.73% from prior day.
Insulet
Wolfe Upgrades Insulet
- Upgraded to Outperform
- Price target: $200
Baird’s Insulet Analysis
- Baird’s valuation model extends from one to 20 years, focusing on high-growth, dream-the-dream stories.
- Four major buckets are independently modeled: US type 1, US type 2 intensive, US basal, and OUS type 1.
- Long-term market penetration rates are highest for US type 1 and lowest for US basal.
- In type 1, PODD is projected to earn 40% market share in US and OUS over time.
- In type 2, PODD is expected to earn 50%+ market share in type 2.
- Terminal margin and growth in DCF are 30% and 3%, respectively.
- Short-term metrics show current levels as undemanding compared to sector growth comps and history.
- PODD trades at approximately 6x on 2025 revenue, with 15%-25% growth comps trading 7x-13x 2025 revenue.
Stock Reaction: Insulet Closes at $184.28
- Opened at $183.01
- Closed at $184.28
- Decline of 4.47% from previous day.
ZoomInfo Technologies
Goldman Downgrades ZoomInfo Technologies
- ZoomInfo downgraded to Sell.
- Price target: $12.
Goldman’s Sell Position in ZI
- Goldman is moving to a Sell position due to lack of visibility around an inflection in trends.
- 1Q24 results show ongoing macro challenges and execution hurdles.
- NER declines to 85% from 87% in 4Q, and net-new revenue continues to contract.
- cRPO growth remains flat/-2% on a yoy/qoq basis.
- Goldman expects a more gradual top-line re-acceleration story.
- Street expectations for growth to accelerate by 600bps in CY25 are seen as an overhang to the stock.
- ZI is seeing improvement in underlying trends, with mid-market retention stabilizing and enterprise improving.
- Goldman waits for indicators of a recovering hiring backdrop, improved execution, and durable expansion before getting more constructive.
ZoomInfo Stock Reaction:
- Opened at $12.12
- Closed at $12.14
- 25% decline from prior day close of $16.02.
Cheesecake Factory
Raymond James Upgrades Cheesecake Factory
- Upgraded to Outperform
- Targeted $42 price.
Raymond James Reports on CAKE Q1 Results
- CAKE’s first-quarter results show competitive resilience and significant outperformance despite a weakening industry.
- The Cheesecake segment has surpassed 2019 margin levels for the second quarter in a row, indicating a robust competitive stance.
- Store margins at growth brands are not meeting unit economic goals, but there is potential for margin improvement into 2024.
- The company’s stock is undervalued with a P/E ratio of around 11x, suggesting room for growth.
- The stock’s high short interest, standing at about 15% of the float, is noted.
- Raymond James maintains a positive outlook on the stock, anticipating potential gains from the current valuation levels.
Stock Reaction: Cheesecake Factory
- Opened regular session at $36.47
- Closed at $36.06
- Gained 6.15% from prior day.
Bumble
Bumble Upgraded by BofA Securities
- Upgraded to Buy
- Price target: $14
BofA Upgrades Bumble to Buy
- BofA confident in Bumble’s ability to meet or exceed Street expectations.
- Bumble exceeded street revenue estimates in Q1 for the first time in two quarters.
- Consensus revenue estimates for FY24 are 80bps below the midpoint of guidance.
- Expanded share repurchase program supports valuation.
- Bumble’s valuation is significantly discounted to projected growth, competitor Match, and consumer subscription comps.
- BofA raises estimates slightly, PO remains $14 on 7x 2025 EV/EBITDA.
- Buy stocks are expected to have a total return of at least 10% and are the most attractive stocks in the coverage cluster.
Stock Reaction: Bumble
- Stock Reaction: Bumble Opens Session at $11.65
- Closes at $11.45, 0.26% gain from previous day.
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