A new analyst entering the field can shift stock prices up or down, often based on what they say. Citi started covering three new application software stocks today: Braze (NASDAQ:BRZE), Hubspot (NYSE:HUBS), and ZoomInfo Technologies (NASDAQ:ZI). For two out of the three, however, the new coverage proved a kiss of death, while one came out significantly ahead as a result.
Borrowing a phrase from the worst of the economic catastrophe in 2008, coined by then-president Barack Obama in 2009, Citi saw “green shoots” coming into play in the information technology market at the corporate level. Citi—via analyst Tyler Radke—offered up some comment on the trio, noting that there is a “healthy recovery” in progress that can be traced back over the last few quarters. Radke further expects several tech firms, including the newly-covered firms, to come back into play as the environment “…supports reprioritization of front-office spending, which aligns with our detailed channel work.”
Radke looks for the most out of Braze and Hubspot, both of which landed a Buy rating. ZoomInfo, meanwhile, walked away with a “neutral” rating. Radke looks for Braze and Hubspot both to benefit greatly from the ongoing flood into generative AI development and other software purchases. Hubspot will also benefit from its focus on the small and medium-sized business market. ZoomInfo, meanwhile, is likely to suffer from an increasing number of competitors eager to compete and turning to price cuts to do so. This is a point already underscored by Wellington Management Group, which pared back some of its own holdings therein after insiders did likewise.
The trio proved a mixed bag with investors, though the wider body agrees with Radke on the biggest points. Both HubSpot stock and Braze stock are considered Strong Buys, while ZoomInfo Technologies stock is a Moderate Buy. However, Braze stock comes with 3.22% downside risk thanks to its $46.63 average share price. Meanwhile, ZoomInfo Technologies stock offers 46.7% upside potential on a $26.56 average price target.
