Coming Up on a Key Test
Current Market Outlook
After a nice five-week recovery rally that saw the S&P 500 recoup 63% of its crash (the Nasdaq got 72% back), some sort of retreat wasn’t uncalled for, and that began last week. How this pullback unfolds will be key: If the intermediate-term uptrend cracks (would likely take another 3% down in some indexes) and many leaders do the same, it will be a sign to back off and/or tighten stops, but to this point, the retreat has been normal for both the major indexes and individual stocks. Thus, we’re obviously watching closely, but we have no change in our stance right here, thinking the path of least resistance remains generally up, but potholes and news-driven moves (especially on earnings) are likely given the recent run-up and the overhead resistance from February. It’s fine to do some buying, but don’t go wild until the buyers really flex their muscles. We’re keeping our Market Monitor at a level 6.
This week’s list has a bunch of intriguing stories, though a few have earnings coming up soon. Our Top Pick is Bandwidth (BAND), a lesser-known outfit whose offering is key to many fast-growing companies.
| Stock Name | Price | ||
|---|---|---|---|
| Bandwidth Inc. (BAND) | 129.19 | ||
| Bill.com Holdings (BILL) | 88.76 | ||
| Coupa Software (COUP) | 262.20 | ||
| Datadog (DDOG) | 81.52 | ||
| Dexcom (DXCM) | 421.36 | ||
| DraftKings Inc. (DKNG) | 38.26 | ||
| Halozyme Therapeutics (HALO) | 24.82 | ||
| Lattice Semi (LSCC) | 23.92 | ||
| Seattle Genetics (SGEN) | 150.85 | ||
| West Pharmaceutical (WST) | 210.25 |
Bandwidth Inc. (BAND)
Why the Strength
Now here’s an interesting story. The mobile workforce had already boosted demand for communication offerings like conference and video calls, messaging and unified communication offerings, with the virus-induced shut-in accelerating that movement. While most know the popular names in the sector (Zoom, RingCentral, Microsoft, etc.), all of them and many others are customers of Bandwidth, which makes those programs work; the firm has an application programming interface (API) platform and also owns a Tier 1 network, allowing customers more control over quality voice (including voice services used in videoconferences), messaging and even 911 services. Pricing its services per API call makes the firm unique among other software companies, allowing it to generate more revenue when customers increase their use of its platform. And by having its own network, it was able to meet a 30% surge in concurrent call demand during March. With millions more Americans now working from home, the firm also doubled capacity for select meeting solutions customers to keep up with this demand. Growth has been solid for a while, and as you’d expect, it picked up in Q1, with revenue lifting 29%, while earnings actually nosed into the black. Better yet, customer growth accelerated to 34% in the quarter, and its top five meeting solutions customers saw a 66% usage increase in March compared to the first two months of 2020. The firm’s balance sheet is impressive, including a cash position of $492 million and no debt, giving it plenty of ammo to expand where it needs to. With a present market penetration of just over 2% in the communications-platform-as-a-service space, there’s still plenty of growth opportunities ahead for Bandwidth.
Technical Analysis
BAND had a big run from the December 2018 market low to 91 last August before pulling back sharply. It was up (back to 88) and down (to 51) after bottoming last October, but there’s been a character change since the market bottom—BAND has now rallied seven weeks in a row, including last Friday’s surge after earnings. There’s still a little overhead to chew through, but we’re OK taking a stab at it here or on normal dips.
| Market Cap | $2.06B | EPS $ Annual (Dec) | |
| Forward P/E | N/A | FY 2018 | 0.43 |
| Current P/E | N/A | FY 2019 | -0.23 |
| Annual Revenue | $248M | FY 2020e | -0.27 |
| Profit Margin | 1.6% | FY 2021e | 0.02 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 68.5 | 29% | 0.04 | N/A |
| One qtr ago | 62 | 18% | -0.02 | N/A |
| Two qtrs ago | 60.5 | 20% | -0.06 | N/A |
| Three qtrs ago | 56.8 | 18% | -0.04 | N/A |
BAND Weekly Chart
BAND Daily Chart
Bill.com Holdings (BILL)
Why the Strength
Bill.com has a great, simple, straightforward growth story that should take it far, especially once the virus situation clears up. The story is all about small- and mid-sized businesses, a shocking percent of which (up to 90% according to some studies) still have back office payment and receivables systems from the medieval days, with paper-based invoices, bills, contracts and more, leading not just to a manual and cumbersome process, but one that is riddled with errors, has little data visibility and can be unsecure, too. Enter Bill.com, whose cloud platform allows these small(er) fries to digitally create and process invoices, streamline approvals and easily send and receive payments, all while syncing to their accounting systems. (Partnerships with accounting firms, account software outfits and financial institutions help attract new business.) Bill.com’s target market are the six million U.S. firms with between two and 500 employees (not sole proprietorships) that make up a $9 billion opportunity for Bill.com, and it’s steadily gaining share; at the end of 2019, the firm served 85,900 customers (up 20% from a year ago) and processed 6.2 million transactions (up 29%) representing $24.8 billion in volume (up 41%). Most of the money comes in via subscriptions (55% of revenue in Q4), but it also gets a cut of every transaction (24%) and from earnings interest on the float (21%, though that’s likely to decline as a share going forward). Revenue growth has been rapid (see table below), and while it could hit a pothole given COVID, there’s no reason growth won’t remain strong for many years as the world turns right side up. Earnings are due Thursday (May 7) after the close.
Technical Analysis
BILL just came public in December, and it had a huge run in its first few weeks … followed by an equally-large plunge during the market’s crash. But the stock enjoyed four straight weeks of big-volume support or buying near the lows, and it’s quickly run nearly back to new highs before recently backing off. If you’re aggressive, you could nibble on BILL ahead of earnings, though we’re more interested to see how the stock reacts to the report.
| Market Cap | $3.98B | EPS $ Annual (Jun) | |
| Forward P/E | N/A | FY 2018 | -0.10 |
| Current P/E | N/A | FY 2019 | -0.09 |
| Annual Revenue | $122M | FY 2020e | -0.33 |
| Profit Margin | N/A | FY 2021e | -0.38 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 39.1 | 50% | -0.05 | N/A |
| One qtr ago | 35.2 | 57% | -0.04 | N/A |
| Two qtrs ago | 25.2 | 54% | -0.06 | N/A |
| Three qtrs ago | 22.1 | 48% | -0.03 | N/A |
BILL Weekly Chart
BILL Daily Chart
Coupa Software (COUP)
Why the Strength
Coupa, the business spend management leader, is another of our favorite cloud software stories. Hailed as the Salesforce.com of expense management, Coupa helps businesses optimize spending—a drawing card in a soft economy—through a unified platform which streamlines the process for the billions of dollars that clients are spending each year on business-to-business buys. The company is getting its foot in the door of the business travel space, most recently acquiring business travel app company ETA after earlier this year grabbing travel price optimizer Yapta. (Near-term, of course, business travel is in the dumps, but there’s no question plenty of it will come back as we return to normal.) Coupa’s revenues are based mainly on subscriptions, which helps, and while new installations of its platform are sure to slow as businesses hunker down, analysts aren’t expecting much of a slowdown; Wall Street sees revenues up in the mid 20% range both this year and next, and given that the company regularly tops expectations, it’s a good bet those numbers will prove conservative. Bigger picture, the top brass sees its entire platform (including its payment systems) targeting a $50 billion opportunity, and while it takes some time and cost for new clients to get up and running (installing and educating them on the platform, etc.), Coupa’s cash flow booms starting a year after customers go live. Big picture, there’s little doubt that Coupa is going to get much, much bigger in the years ahead.
Technical Analysis
We previously observed that COUP’s stock likely had a “reset” in March after dipping below the stock’s low from the second half of last year. It found two massive-volume weeks of support near the lows, ripped above key moving averages three weeks ago and tested new-high ground last week. With earnings not out until June, we’re OK starting small around here if you don’t own any.
| Market Cap | $11.2B | EPS $ Annual (Jan) | |
| Forward P/E | 534 | FY 2019 | 0.18 |
| Current P/E | 345 | FY 2020 | 0.52 |
| Annual Revenue | $390M | FY 2021e | 0.33 |
| Profit Margin | 13.5% | FY 2022e | 0.60 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 112 | 49% | 0.21 | 320% |
| One qtr ago | 102 | 51% | 0.20 | 150% |
| Two qtrs ago | 95.1 | 54% | 0.07 | 40% |
| Three qtrs ago | 81.3 | 44% | 0.03 | N/A |
COUP Weekly Chart
COUP Daily Chart
Datadog (DDOG)
Why the Strength
We’ve written about Datadog a few times previously, as it looks like one of the real leaders in the newer application performance management (APM) sector. With the movement to the cloud still in the early-ish innings, the need to monitor the performance and interaction of all the various apps that firms are now using and are located up in the cloud is surging. Datadog’s offering provides real-time analytics of every aspect of a firm’s technology assets, which not only alerts IT teams to issues, but facilitates faster problem solving and (importantly) boosts the client’s overall customer service experience through a comprehensive understanding of how all its systems and cloud apps work together. As with most software outfits, the company is continually adding new services to its platform, including several new network monitoring offerings in 2019; the uptake of these new products is one reason Datadog has one of the best same-customer growth rates (north of 30%) in the entire software field. Of course, this isn’t just about milking current customers—Datadog added more than 1,000 customers last quarter (double the new adds from a year ago), helping total revenues to boom 84%. For last year as a whole, new clients made up 40% of the growth, with the rest coming from follow-on purchases from existing clients. The bottom line is right around breakeven, which isn’t bad as Datadog invests in the future. The next big event is earnings, which are due out May 11.
Technical Analysis
DDOG broke out of a post-IPO base in late January and motored as high as 50 in February before collapsing back toward its lifetime lows with the market in March. However, the action since then has been excellent—after two big-volume support weeks near the lows, DDOG has rallied six straight weeks, albeit on so-so volume. Given that earnings are coming up and there’s overhead in the upper 40s to chew through, we’d suggest starting small and aiming for dips.
| Market Cap | $13.3B | EPS $ Annual (Dec) | |
| Forward P/E | N/A | FY 2018 | -0.04 |
| Current P/E | N/A | FY 2019 | -0.04 |
| Annual Revenue | $363M | FY 2020e | -0.06 |
| Profit Margin | 0.8% | FY 2021e | -0.03 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 113.6 | 84% | 0.01 | N/A |
| One qtr ago | 95.9 | 88% | -0.01 | N/A |
| Two qtrs ago | 83.2 | 82% | -0.01 | N/A |
| Three qtrs ago | 70 | 76% | -0.03 | N/A |
DDOG Weekly Chart
DDOG Daily Chart
Dexcom (DXCM)
Why the Strength
Dexcom has been a liquid leader in the market since November thanks to its leading position in the continuous glucose monitor (CGM) market, which is helping to lead the transition away from multiple daily insulin injections, a movement that has plenty of runway ahead of it (less than 40% of Type 1 and 15% of Type 2 U.S. diabetics use CGMs, and those percentages are far lower overseas). And it remains one of the market’s top stocks after a fantastic Q1 report—sales (up 44%) and earnings (44 cents per share, up from a loss a year ago) both crushed estimates, with strength across the board (inside and outside the U.S., hardware and sensors, continued strong uptake in pharmacies where patients have less out-of-pocket costs, etc.). That’s not to say COVID has had no impact; starting in March and into April, new patient additions slowed sharply, but at only about half the pace Wall Street was expecting, and management said it had already begun to see the pace improve by April’s end. Plus, the rollout of the next-generation G7 CGM is likely to be delayed a few months as the virus has stopped studies in their tracks. But the underlying growth trends are intact here, and there’s plenty of good news with the G6, including regulatory approval in Australia, South Korea and Japan and the fact that UnitedHealth is now offering in-network coverage for insulin-intensive Type II patients. Analysts see tame results this year (earnings up 11%) before a big re-acceleration in 2021 (up 44%), though we think this year’s figure will prove low as Dexcom almost always beats official estimates.
Technical Analysis
DXCM fell hard along with everything else in March, but found support near its 200-day line (better than most stocks), broke out around 285 last month and rushed to new highs soon after. There have been a couple of hiccups lately, including the day ahead of earnings, but DXCM reacted well to the report and remains perched right near all-time highs. We’re not opposed to a small buy here, but like many stocks that have had big recoveries, you’ll likely be able to grab shares on dips.
| Market Cap | $30.8B | EPS $ Annual (Dec) | |
| Forward P/E | 163 | FY 2018 | 0.37 |
| Current P/E | 144 | FY 2019 | 1.84 |
| Annual Revenue | $1.60B | FY 2020e | 2.06 |
| Profit Margin | 10.2% | FY 2021e | 2.96 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 405 | 44% | 0.44 | N/A |
| One qtr ago | 463 | 37% | 1.15 | 105% |
| Two qtrs ago | 396 | 49% | 0.65 | 261% |
| Three qtrs ago | 336 | 39% | 0.08 | N/A |
DXCM Weekly Chart
DXCM Daily Chart
DraftKings Inc. (DKNG)
Why the Strength
Sports betting is an $833 million business that is projected to be worth $8 billion by 2025. DraftKings is an early leader and has been described as an “almost pure play” in Internet gaming. The first U.S. online sports book outside of Nevada, it allows online bets to be made on numerous popular sports and daily fantasy sports contests, where participants pay an entry fee from $1 to over $1,000 to place bets, allowing them to “draft” players in fantasy leagues with a chance to win cash prizes. With sports shut down by the pandemic, revenue is down for DraftKings, but it’s engaging customers with alternative lines (including political bets and the recent NFL draft). And besides, this is all about the future—the firm’s CEO sees tremendous pent-up demand for sports betting, which is forecast to rebound strongly once the lockdowns end. (News this weekend that the NFL is still planning on a full season this fall is a plus.) Moreover, the shutdown may actually benefit the firm in the long run since more states are expected to legalize online gambling to fill holes in their budgets. The firm has a complicated history of name changes and mergers, but looking ahead, the Street expects annual revenue growth of 30%-plus over the next five years, with the player base estimated to grow fourfold. Analysts predict profitability in 2023 and see he company achieving 20% market share of total U.S. sports betting while capturing 15% of online gambling. It’s a speculative play, but this is a huge opportunity, and DraftKings is in pole position to capture major share.
Technical Analysis
DKNG has a weird chart due to a reverse merger that resulted in the company in its current form. But what matters most is the recent action. After rallying to 19.5 in February and plunging below 11 during the market crash, DKNG has surged back to new highs on a big pickup in volume as more big investors learn of the story. Volatility is extreme here, but we’re OK with picking up a small position around here with a loose stop.
| Market Cap | $16.3B | EPS $ Annual (Dec) | |
| Forward P/E | N/A | FY 2018 | N/M |
| Current P/E | N/A | FY 2019 | N/M |
| Annual Revenue | $432M | FY 2020e | N/A |
| Profit Margin | N/A | FY 2021e | N/A |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | N/M | N/M | N/M | N/M |
| One qtr ago | N/M | N/M | N/M | N/M |
| Two qtrs ago | N/M | N/M | N/M | N/M |
| Three qtrs ago | N/A | N/M | N/M | N/M |
DKNG Weekly Chart
DKNG Daily Chart
Halozyme Therapeutics (HALO)
Why the Strength
Halozyme has been a nothing-burger for a long time, but that’s changing thanks to some big news. The FDA announced last week that approved it’s approved DARZALEX, a multiple myeloma drug created by both Halozyme and collaborator Janssen Biotech (a subsidiary of Johnson & Johnson); the approval spans four regimens across five indications. Multiple myeloma is a cancer of the white blood cells in bone marrow, which can wreak havoc on the bones, immune system, kidneys and red blood cell count. The drug is a big deal, as patients can now be treated in minutes with a subcutaneous injection rather than through an intravenous infusion that lasts several hours. This injection is possible via Halozyme’s proprietary ENHANZE drug-delivery technology that enables a greater volume of biologics to be delivered just under the skin. The two companies also received good news from Europe when the European Medicine Agency issued a positive opinion on the drug, and after Europe comes Japan, where Janssen has recently filed a New Drug Application. HALO’s ENHANZE technology has additional partners in Roche and Bristol Myers-Squibb, from which it is receiving payments. As for the numbers, the next quarterly report is due May 11, and while results aren’t likely to impress, this is all about what’s to come—earnings are expected to leap into the black this year and soar again in 2021 as sales ramp (21% expected this year, 38% next). It looks like a good, fresh story.
Technical Analysis
As mentioned above, HALO wasn’t much to look at for the past couple of years, though it actually showed signs of getting going starting last November before the market pulled it as low as 13 in March. The bounce was just OK early on, but HALO has really picked up steam since mid April and is currently perched near multi-year highs. We’re fine grabbing shares here or on pullbacks and use a loose stop.
| Market Cap | $3.16B | EPS $ Annual (Dec) | |
| Forward P/E | N/A | FY 2018 | -0.56 |
| Current P/E | 36 | FY 2019 | -0.50 |
| Annual Revenue | $196M | FY 2020e | 0.63 |
| Profit Margin | N/A | FY 2021e | 1.43 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 53.7 | -11% | -0.24 | N/A |
| One qtr ago | 46.2 | 81% | -0.17 | N/A |
| Two qtrs ago | 39.1 | 11% | -0.10 | N/A |
| Three qtrs ago | 57 | 84% | 0.01 | N/A |
HALO Weekly Chart
HALO Daily Chart
Lattice Semi (LSCC)
Why the Strength
While the coronavirus has set back demand for consumer products, enterprise orders are keeping the semiconductor business afloat—it’s now forecast that annual global chip sales will rise 5.9% this year and 6.3% in 2021. And that’s showing up on the books of semiconductor companies already. Lattice Semiconductor makes low power programmable semiconductor chips for the communications, computing, industrial, automotive and consumer markets. The stock is strong today thanks to a solid quarterly report last week; earnings came in at $0.15 per share, beating analyst estimates by a penny (the third time in the last four quarter it’s topped expectations) and up 36% over last year. Revenues were $97.3 million, though results there were mixed; the consumer segment saw revenues plunge 24% from a year ago (partly due to the virus), but communications/computing was up 8% (including far faster growth in 5G-related products) and the industrial and auto markets saw sales leap 14%. More important, management has squeezed out costs, lifting margins and allowing it to post healthy earnings growth. The virus shut-in will continue to have an impact in the near-term (sales are expected to be flat-ish this year), but investors are betting on a pickup as the world goes back to normal.
Technical Analysis
LSCC effectively topped out around 21 last July, though it did briefly sneak out to 24 before falling with the market in February/March. Since the low, shares have done a nice job of rounding out, and LSCC reacted nicely after earnings last Wednesday. It’s backed off some since, but we’re fine snagging some here with a relatively tight stop just under 19, and adding to the position if the stock heads higher.
| Market Cap | $2.83B | EPS $ Annual (Dec) | |
| Forward P/E | 38 | FY 2018 | 0.33 |
| Current P/E | 35 | FY 2019 | 0.59 |
| Annual Revenue | $403M | FY 2020e | 0.60 |
| Profit Margin | 20.8% | FY 2021e | 0.75 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 97.3 | -1% | 0.15 | 36% |
| One qtr ago | 100 | 4% | 0.17 | 113% |
| Two qtrs ago | 104 | 2% | 0.17 | 55% |
| Three qtrs ago | 102 | 0% | 0.15 | 50% |
LSCC Weekly Chart
LSCC Daily Chart
Seattle Genetics (SGEN)
Why the Strength
While the group has taken a few hits, biotech-related stocks continue to look capable of leading the market higher, and Seattle Genetics is one of the best-looking names in the group, thanks in part to a great Q1 report and outlook. To review, the company has the makings of a new oncology powerhouse—the firm’s Adcertis drug has become a front-line treatment for a couple of types of lymphoma (it’s been the revenue driver in recent years), and there’s huge potential in recently-approved Padcev (for urothelial cancer, approved late last year) and Tukysa (breast cancer, approved on April 17); beyond the here and now, all three should benefit from label expansions in the years ahead. The stock has been strong thanks to the prospects of these treatments and got an extra pop after last week’s quarterly report: Padcev saw a very quick uptake (revenues of nearly $35 million, seven times estimates), while Adcertis basically met estimates and management stuck to its forecast of nearly 10% growth for that drug this year. The Tukysa launch is sure to be slow (being conducted virtually because of COVID), but even so, analysts hiked their estimates—2020 should see product revenues and royalties lift 29% (a big drop in collaboration revenues will keep total revenue growth to just 12%, but that’s not what Wall Street is focused on), while 2021’s top line should boom more than 50%. Earnings probably won’t show up until 2022, but with three potential huge sellers, big investors (including a lot of sharp money managers) are jumping in. We like it.
Technical Analysis
SGEN was one of the first stocks to get going back in October of last year, but its rally stalled out quickly (mid November) and shares entered into what turned out to be a five-month consolidation. The March correction wasn’t all bad (support at the 200-day line) and shares decisively moved out to new high ground last month. SGEN hesitated last week, both before and after earnings, but the stock remains in great shape. We’re OK taking a stab at it here or on weakness.
| Market Cap | $25.5B | EPS $ Annual (Dec) | |
| Forward P/E | N/A | FY 2018 | -1.56 |
| Current P/E | N/A | FY 2019 | -0.96 |
| Annual Revenue | $956M | FY 2020e | -2.99 |
| Profit Margin | N/A | FY 2021e | -1.48 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 235 | 20% | -0.98 | N/A |
| One qtr ago | 290 | 66% | 0.14 | N/A |
| Two qtrs ago | 213 | 26% | -0.55 | N/A |
| Three qtrs ago | 218 | 28% | -0.49 | N/A |
SGEN Weekly Chart
SGEN Daily Chart
West Pharmaceutical (WST)
Why the Strength
West Pharmaceuticals isn’t the sexiest story, but the company is reliable and serving markets where demand remains strong, which counts for a lot these days. The stock is doing well because Q1 earnings easily topped expectations and management stuck by its forecast for the rest of the year (a rarity these days), giving the green light for big investors to dive in. The company makes syringes, vials, and cartridges for injectable devices, as well as films, coatings and washing and sterilization processes to enhance the quality of packaging components; all in all, it has more than 2,000 customers, none of which makes up more than 7% of revenue. Longer-term the increase in biologic medicines and injectable drugs is a tailwind, which should lead to years of double-digit growth, though the real focus is on the immediate future—Q1 currency-neutral revenue growth neared 13% in Q1, led by double-digit growth in biologics and contract manufactured products, while earnings of $1.01 per share were 15 to 20 cents above most estimates as margins lifted nicely. Growth isn’t going to be off the charts (management guided to about 10% earnings growth this year), but given that West usually tops expectations (has done so four straight quarters), those estimates will likely prove too low. West won’t win any beauty contests but its steady, reliable growth profile should keep it in favor.
Technical Analysis
WST broke out last July from a big base and ran from 127 to 176 before round-tripping with the market in March. But that weakness proved short lived, as the stock immediately began climbing back, rallying five weeks in a row, including its earnings-induced pop two weeks ago. The five-day rest since then looks buyable to us.
| Market Cap | $13.9B | EPS $ Annual (Dec) | |
| Forward P/E | 56 | FY 2018 | 2.81 |
| Current P/E | 54 | FY 2019 | 3.24 |
| Annual Revenue | $1.89B | FY 2020e | 3.38 |
| Profit Margin | 15.5% | FY 2021e | 3.92 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 492 | 11% | 1.01 | 36% |
| One qtr ago | 471 | 11% | 0.82 | 12% |
| Two qtrs ago | 456 | 6% | 0.79 | 4% |
| Three qtrs ago | 470 | 5% | 0.89 | 27% |
WST Weekly Chart
WST Daily Chart
Previously Recommended Stocks
Below you’ll find Cabot Top Ten Trader recommended stocks. Those rated HOLD are stocks that traded within our suggested buy range within two weeks of appearing in the Top Ten and still look good; hold if you own them. Stocks rated WAIT have yet to dip into our suggested buy range … but can be bought if they do so within the next week.
Those stocks rated SELL should be sold if you own them; they will no longer be listed here. Finally, Stocks in the DROPPED category are those that failed to trade within our buy range within two weeks of our recommendation; that’s not a bad thing, we just never got the price we wanted. Please use this list to keep up with our latest thinking, and don’t hesitate to call or email us with any questions you may have. New recommendations each week are in green.
| Date | Stock | Symbol | Top Pick | Original Buy Range | 5/4/2020 |
| HOLD | |||||
| 4/20/20 | Acadia Pharma | ACAD | 48-51 | 47 | |
| 2/18/20 | Acceleron Pharma | XLRN | 88-92 | 97 | |
| 4/20/20 | Advanced Micro Devices | AMD | 53-56 | 53 | |
| 4/27/20 | Alnylam Pharm | ALNY | 136-141 | 137 | |
| 4/13/20 | American Tower | AMT | 238-248 | 237 | |
| 3/16/20 | Apple | AAPL | 238-248 | 293 | |
| 4/20/20 | ASML Holdings | ASML | 285-295 | 283 | |
| 3/30/20 | Atlassian | TEAM | 139-144 | 163 | |
| 3/30/20 | Barrick Gold | GOLD | 18-19.5 | 27 | |
| 1/6/20 | Bilibili | BILI | 20.5-22 | 27 | |
| 3/23/20 | Chewy | CHWY | ? | 29-32 | 39 |
| 4/13/20 | Ciena | CIEN | 42.5-44 | 47 | |
| 3/23/20 | Cloudflare | NET | 19-21 | 24 | |
| 3/23/20 | Coupa Software | COUP | 124-132 | 177 | |
| 4/20/20 | CrowdStrike | CRWD | 65-67.5 | 73 | |
| 11/11/19 | Dexcom | DXCM | 196-205 | 353 | |
| 9/9/19 | DocuSign | DOCU | ? | 55-58 | 107 |
| 4/27/20 | Exelixis | EXEL | 25-26.5 | 26 | |
| 4/6/20 | Five9 | FIVN | 74.5-78 | 96 | |
| 4/20/20 | Franco Nevada | FNV | 122-126 | 143 | |
| 4/27/20 | Freshpet | FRPT | 74-78 | 72 | |
| 3/23/20 | Gilead Sciences | GILD | 69-72 | 80 | |
| 4/20/20 | Immunomedics | IMMU | 20.5-22 | 32 | |
| 3/16/20 | Inphi | IPHI | ? | 62.5-66 | 92 |
| 4/27/20 | MarketAxess | MKTX | 420-440 | 457 | |
| 3/16/20 | Masimo | MASI | ? | 172-177 | 226 |
| 3/23/20 | Moderna | MRNA | 25.5-28 | 51 | |
| 3/30/20 | Netflix | NFLX | 355-375 | 428 | |
| 3/9/20 | Newmont Corp | NEM | 46.5-48.5 | 63 | |
| 3/30/20 | Nvidia | NVDA | 250-270 | 291 | |
| 3/30/20 | Okta | OKTA | ? | 118-126 | 155 |
| 4/27/20 | PayPal | PYPL | 117-122 | 124 | |
| 4/6/20 | Pelaton | PTON | 27-29 | 34 | |
| 4/27/20 | Pinduoduo | PDD | ? | 48-51.5 | 46 |
| 3/30/20 | Quidel | QDEL | 91-95 | 139 | |
| 3/2/20 | Regeneron Pharm | REGN | ? | 435-455 | 542 |
| 3/16/20 | Repligen | RGEN | 83-86 | 114 | |
| 4/6/20 | RingCentral | RNG | 213-225 | 234 | |
| 4/20/20 | Sea Ltd. | SE | 51-53 | 55 | |
| 3/2/20 | Seattle Genetics | SGEN | ? | 107-111 | 156 |
| 4/20/20 | Shopify | SHOP | 575-615 | 659 | |
| 3/23/20 | Smartsheet | SMAR | 41-43.5 | 54 | |
| 4/27/20 | Snap | SNAP | 15.5-17 | 17 | |
| 10/28/19 | Teladoc | TDOC | 69-72 | 174 | |
| 11/11/19 | Tesla | TSLA | 320-335 | 761 | |
| 4/20/20 | Tradeweb Markets | TW | 50-52 | 54 | |
| 10/28/19 | Vertex Pharm. | VRTX | ? | 191-196 | 265 |
| 4/13/20 | Wheaton Precious Metals | WPM | 31-32.5 | 41 | |
| 2/24/20 | Zoom Video | ZM | ? | 96-104 | 143 |
| 4/6/20 | Zscaler | ZS | 61-64 | 69 | |
| WAIT | |||||
| 4/27/20 | Boston Beer | SAM | 435-450 | 470 | |
| SELL RECOMMENDATIONS | |||||
| 4/6/20 | Novavax | NVAX | 13-14.5 | 18 | |
| 4/6/20 | Sprouts Farmers Mkt | SFM | 18.5-19.5 | 22 | |
| 3/9/20 | ZTO Express | ZTO | 25.5-26.5 | 28 | |
| DROPPED | |||||
| None this week | |||||
The next Cabot Top Ten Trader issue will be published on May 11, 2020.