Wednesday's IBD 50 Stocks To Watch pick Procore Technologies is one of the top stocks to buy and watch in the struggling stock market uptrend. PCOR stock rose 0.3% Wednesday midday, trading just below the latest buy point following Friday's high-volume breakout.
Headquartered in California's Santa Barbara County, Procore Technologies provides a cloud-based construction management software platform. According to marketing materials, Procore products are designed to "help firms drastically increase project efficiency and accountability by streamlining and mobilizing project communications and documentation."
The Feb. 16 Q4 2022 earnings release sparked a breakout attempt past the latest buy point in reaction to better-than-expected earnings and sales. The company lost 8 cents per share on revenue of $202.1 million. The EPS loss narrowed from last year's 15-cent loss, while year-over-year sales rose 38%.
Procore's IBD Stock Ratings
This software stock to buy and watch has a weak 26 out of a best-possible 99 Earnings Per Share Rating and an SMR Rating of "D," according to IBD Stock Checkup.
Procore's annual EPS loss widened to 51 cents in 2022, from 2021's 35-cent loss.
But the bottom line is slowly trending in the right direction, with the EPS loss expected to narrow to 41 cents in 2023 and 24 cents in 2024.
Meanwhile, over the last three quarters, average sales have grown at a healthy 40% clip.
Showing a modest 78 out of a perfect 99 IBD Composite Rating, Procore is a speculative name due to its lack of a long-term fundamental track record. And, as with many young companies, the company is still losing money. Still, Procore is one of the top stocks to buy and watch after its strong first-quarter performance, as evidenced by the relative strength line at new highs.
The relative strength line hit a new high last week, which is a bullish signal when it coincides with a breakout. The RS line measures a stock's price performance vs. the S&P 500.
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Stocks To Buy And Watch: PCOR Hits Buy Point
Procore shares bottomed on Jan. 6 and rallied more than 64% to last week's high at 68.56.
Amid the big rally, it is trying to break out past a 66.08 buy point in a consolidation, according to IBD MarketSmith. Shares are just below the latest entry after Friday's breakout attempt, when it briefly mounted the magic line.
If the stock retakes the buy point, the 5% buy area will top out at 69.38. PCOR stock rose 0.3% midday Wednesday, just 2% away from the entry.
Given its superior technical strength, Procore is one of the top stocks to buy and watch in the struggling stock market rally. On Tuesday, IBD downgraded the market status from "confirmed uptrend" to "uptrend under pressure." So, investors should be more on the defensive until the stock market rebounds.
Other IBD 50 Stocks To Buy And Watch
These are three recent IBD 50 Stocks To Watch picks.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| HubSpot | 399.65 | Cup with handle | |
| Monolithic Power Systems | 541.49 | Cup base | |
| Super Micro Computer | 92.90 | Double bottom |
Source: IBD Data As Of Feb. 22, 2023
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on top stocks to buy and watch and the stock market.
