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Analyzing the Recent Decline in High-Growth Stocks

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Dec. 4 2020, Updated 10:53 a.m. ET

ServiceNow

High-growth stocks including ServiceNow (NOW), Splunk (SPLK), Pure Storage (PSTG), and Square (SQ) performed spectacularly in the first half of 2018. ServiceNow rose 56% between January and September. However, the stock has declined 20% since the beginning of October and 13.4% in November.

ServiceNow shares fell 8.4% to $156.8 on November 19. The shares are trading 24% below its 52-week high of $206.30. Among the 34 analysts tracking ServiceNow, 30 recommended a “buy,” four recommended a “hold,” and none of the analysts recommended a “sell.” The analysts have a 12-month average target price of $210.76 for ServiceNow, which indicates an upside potential of 34% for the stock.

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Splunk

Although Splunk shares have risen 8% in 2018, the stock has declined 10.6% in November and 26% since the beginning of October. Splunk stock fell 11.2% to $89.27 on November 19. The stock is trading 31% below its 52-week high of $130.

Among the 43 analysts tracking Splunk, 33 recommended a “buy,” ten recommended a “hold,” and none of the analysts recommended a “sell.” The analysts have a 12-month average target price of $131.69 for Splunk, which indicates an upside potential of 48% for the stock.

Square

Square (SQ) shares have risen 82% in 2018. However, the recent pullback has driven the stock lower by 14% in November and 36% since the beginning of October. Square stock fell 10.8% to $62.97 on November 19. The stock is trading 38% below its 52-week high of $101.15.

Among the 31 analysts tracking Square, 17 recommended a “buy,” 14 recommended a “hold,” and none of the analysts recommended a “sell.” The analysts have a 12-month average target price of $85.97 for Square, which indicates an upside potential of 37% for the stock.

Pure Storage

Pure Storage (PSTG) shares have risen 10.5% in 2018. However, the recent decline has driven the stock lower by 13% in November and 32% since the beginning of October. Pure Storage stock fell 8.3% to $17.53 on November 19. The stock is trading 40% below its 52-week high of $29.14.

Among the 20 analysts tracking Pure Storage, 14 recommended a “buy,” six recommended a “hold,” and none of the analysts recommended a “sell.” The analysts have a 12-month average target price of $27.06 for Pure Storage, which indicates an upside potential of 54% for the stock.

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