A day after Stephen Weiss said he didn’t see any “positive catalyst” for the market ahead, Grace Capital’s Catherine Faddis picked two stocks where she still sees opportunity, despite several factors that could make it harder for investors to make money in Q4.
Faddis’ comments on CNBC’s “Worldwide Exchange”
Market cap is $37 billion; revenues are running at a rate of $1.3 billion a year. So, it’s trading at 30 times revenue; not cheap, but the revenues are expected to double every couple of years.
Zscaler is particularly an interesting pick since the stock has already climbed by over 30% this year. Earlier this month, however, the cybersecurity company said its loss widened in the fiscal fourth quarter.
Why Faddis likes Okta Inc
Faddis’ second pick is Okta Inc (NASDAQ: OKTA) that she says “works together” with Zscaler.
Before Zscaler offers the firewall, they validate your identity through Okta. The identity space is a huge $80 billion market. The U.S. government is getting in on the game. With a $37 billion market cap and growing 45% revenue a year, we own Okta, we love it, and we expect it to keep growing.
At $1.2 billion revenue, Faddis agreed that Okta wasn’t cheap either but was convinced that now would be a good time to own it. The stock is down a little under 20% from its year-to-date high in February.
Other names she likes for Q4 include RadNet Inc.
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