Amazon-partner MongoDB and fellow AI-related plays Globant and Synopsys, are among this week's stocks to watch near buy points. Homebuilder Lennar and China-based New Oriental Education are approaching entries, too.
MongoDB
New York-based database software company MongoDB rocketed 108% in 2023, boosted by triple-digit earnings growth and bullish views that MongoDB will benefit from enterprise adoption of artificial intelligence. However, most of that run occurred in the first half of the year before stagnating.
MDB stock got a bit of a boost at the end of 2023 on new collaborations with Amazon. Amazon in November announced plans to integrate MongoDB's Atlas Vector Search database with Amazon Bedrock, which will allow customers to utilize generative AI tools and develop AI applications through AWS. Earlier in November, Amazon partnered with MongoDB to optimize its open-source database management program for Amazon CodeWhisperer, Amazon's code-generating tool, TechCrunch reported.
However, shares tumbled after MongoDB's December earnings report as Atlas software sales growth fell short of lofty expectations from analysts.
MongoDB is a member of the IBD 50.
MDB stock jumped 6.6% on Friday to 436.01, clearing a 426.51 handle buy point, moving in sympathy after the Amazon earnings report. Shares jumped 10.3% for the week, bouncing off the 50-day moving average and 21-day line.
MongoDB has a perfect 99 Composite Rating, which combines various technical indicators into one easy-to-read score. Shares have an 83 EPS Rating. MongoDB's relative strength line is trending up to early-December levels. The stock has a 95 RS Rating.
Globant
Luxembourg-based Globant provides information-technology data and services to companies across the Americas, Europe and Australia and leads the Computer-Tech Services industry group, according to IBD Stock Checkup.
Globant's earnings growth has picked up slightly in last two quarters, but analysts expect the pace to accelerate.
Mizuho initiated coverage of GLOB stock Monday with a buy rating and 283 price target, noting it expects strong organic growth and top-line execution to continue amid next-generation technologies and generative AI.
Meanwhile, Needham forecasts organic growth to accelerate as macroeconomic conditions approve, according to a Jan. 26 research note. Global 2000 firms have moderated spending levels over the past several quarters due to macro challenges and it will likely be a gradual recovery, Needham wrote.
Still, the firm is "impressed" with Globant's sales execution and industry-leading growth. Needham lifted its price target to 275 from 215 and maintained a buy rating on the shares.
GLOB stock jumped 4.9% during the week to 249.69, briefly topping a 250.39 flat-base buy point on Friday. That's after rebounding off its 21-day exponential moving average and 10-week line on Thursday.
Investors could view the Jan. 29 high of 247.49 as a slightly early entry, as well as being close to the 10-week ling.
Globant has a 99 Composite Rating and a 96 EPS Rating. GLOB has a 95 RS Rating.
Shares have advanced 4.9% so far this year.
Synopsys
Chip design and manufacturing company Synopsys tumbled nearly 17% from record highs in late December and early January on Ansys takeover reports. Shares have since rebounded after the $35 billion deal was formally announced on Jan. 16. The deal should balloon Synopsys' total addressable market by 50% to $28 billion. However, Synopsys doesn't expect the acquisition to close until 2025 and will take over a year to bolster earnings.
A number of firms lowered their price target on SNPS stock following the news due to the lack of a near-term synergy boost.
FactSet expects Synopsys to report Q1 adjusted earnings of $3.43 per share, up 39% from last year but slowing after two quarters of accelerating gains. Analysts forecast a 20.9% revenue increase to $1.65 billion.
SNPS stock is an IBD Long-Term Leader, along with rival Cadence Design Systems, which reports ahead of Synopsys.
Synopsys is also a member of the IBD 50 list and Big Cap 20, and the IBD Breakout Stocks Index .
SNPS stock is nearing a 554.57 cup-with-handle buy point. The stock broke a trendline in the handle at the end of the week to offer an early entry, after rebounding above its 50-day line.
Synopsys has perfect Composite and EPS Ratings at 99. SNPS stock's relative strength line is working back toward mid-December highs with an 91 RS Rating.
New Oriental Education
China-based online education services provider New Oriental Education more than doubled in 2023 on five straight quarters of triple-digit earnings gains.
New Oriental Education on Jan. 24 reported a 190% increase in Q2 adjusted earnings to 29 cents per share while revenue leapt 36% to $870 million in what's "traditionally the slowest quarter of the year." Wall Street expected earnings of 26 cents per share on $814 million in sales. The company guided Q3 revenue to jump 40% to range from $1.07 billion to $1.09 billion, ahead of FactSet forecasts of $942 million.
JPMorgan after the earnings report lifted its price target on EDU to 95 from 80, noting the beat-and-raise guidance suggests the tutoring business is in a "Goldilocks environment," with very positive supply-demand dynamics and a stable policy backdrop. The firm maintained an overweight rating on the shares.
New Oriental Edu ranks third in the Consumer Services-Education industry group, which is led by Afya.
EDU stock is approaching an 82.25 handle buy point within an eight-week consolidation after its huge 2023 run. Shares flashed above an early entry at 78.19 on its Q2 earnings late last month, but then backed off.
New Oriental Education has a 97 Composite Rating and an 82 EPS Rating. Shares have a 96 RS Rating.
Lennar
Lennar was the IBD Stock Of The Day for Wednesday. The stock is constructing a 50% run from the end of October and marked its third straight monthly gain in January.
The homebuilder surprised Wall Street on Dec. 15 with better-than-expected Q4 earnings and revenue. But Lennar's Q1 guidance fell short of analyst predictions, sparking shares to reverse from a record high. Still, LEN, shares rallied 21% in December and continued to climb at the turn of the year as interest rates hover around 6.78%.
Meanwhile, the U.S. faces a housing shortage of about 5.5 million homes, according to the National Association of Realtors. The NRA estimates the gap will take more than a decade to close even if new home construction accelerates.
On Jan. 9, Lennar hiked its annual dividend by 50 cents to $2 per share. The homebuilder also authorized an increase to its stock-repurchase program to $5 billion.
LEN stock held support at the 21-day and 10-week last week, rebounding from those levels Friday. It's trading near a 156.01 flat-base buy point.
Many homebuilders and construction-related plays have been consolidating bullishly in recent weeks.
Lennar has a 95 Composite Rating and a 91 RS Rating. Shares have an 82 EPS Rating, as earnings fell by double digits for three straight quarters leading up to its Q4 report.
LEN stock has risen 3.3% in 2024.
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