Wall Street’s top analysts see gains for these stocks
A sign will be posted outside NVIDIA headquarters in Santa Clara, California on May 10, 2018.
Justin Sullivan / Getty Images
With COVID-19 cases rising again around the world and growing concerns about the economic reopening, it can be difficult to navigate the current financial landscape.
In this case, the key is to look for stocks that not only appear undervalued, but are poised for future gains.
The names below fit the bill and are backed by analysts with impressive stock picking skills. TipRanks’ analyst forecasting service identifies the best performing Wall Street analysts or the analysts with the highest success rate and average return per rating. These metrics take into account the number of reviews each analyst has published.
Here are the analysts’ best stock picks right now:
The Lovesac Company
After the “extremely optimistic” results of the fourth quarter, the bullish thesis of Oppenheimer analyst Brian Nagel on The Lovesac Company remains very intact. As such, he repeated a buy recommendation for the furniture manufacturer. In another sign of optimism, the analyst raised the target price from USD 60 to USD 85 (18% upside potential).
Looking at printing, the company posted adjusted EBITDA of $ 25.9 million, slightly beating the consensus estimate of $ 12.6 million. In addition, the gross margin increased 900 basis points to 57.9% from 49% in the prior-year quarter.
“For some time now, we’ve been highlighting Lovesac as a compelling and still largely overlooked digitally-driven growth opportunity for small caps in home furnishings and consumers by and large. The stocks have rebounded and recently exceeded our previous target,” commented Nagel.
Management did not offer any formal guidance for fiscal year 21 due to the ongoing uncertainty, however estimates of brand awareness for the company and its products were provided without endorsement. With only 2%, Nagel informs investors that “Lovesac still has considerable sales and market share opportunities in the short and long term, especially since the management continues to improve the reach and effectiveness of marketing”.
Commenting on the opportunity ahead, Nagel explained, “In our view, a restart of key investments in the coming quarters combined with now improved operational controls and a still healthy tailwind from the LOVE Sector position well for further oversized sales and profit expansion in 2022 and beyond . “
Against this background, in the opinion of Nagel, the LOVE share “significantly underestimates the short and long-term prospects”.
A success rate of 79% and an average return of 38.4% per review support Nagel’s No. 6 on the TipRanks list.
Bank of America Securities analyst Daniel Bartus has just resumed coverage of RingCentral because the company has “the right partners at the right time.” In addition to assigning a buy rating, he set a price target of USD 450, which means that the upside potential is 38%.
Although Bartus’ price target is based on 23x CY22E EV / S, which reflects a premium for the software as a service group at 18x to 19x, the analyst believes this is “justified”.
Noting that “RingCentral is leading the UCaaS market at an important turning point for the industry,” Bartus notes that the company has entered into agreements with Avaya, ALE and Atos / Unify, the leading UC providers, to develop their exclusive cloud solutions. To be a partner.
UCaaS stands for “Unified Communications as a Service”.
“We believe the timing of these deals aligns well with COVID, which is acting as a major cloud catalyst for existing enterprise customers. In addition to RingCentral’s track record of 30% plus 2017-2020 revenue growth, we think market diffraction and partnership contributions are likely our partner model also shows a path to $ 10 billion in revenue in FY 30 versus our estimate of $ 1.5 billion in 21, which supports a potential plus above our price target, “said Bartus.
On the grounds that “COVID has not created a short-lived tailwind for UCaaS providers and has instead given an already healthy market several years of dynamism,” the analyst points to two further competitive advantages for RNG.
First and foremost, Bartus believes that RNG has “superior telephony that stays critical”. In addition, the xCaaS offering is more “holistic” and now includes video meetings and closer CCaaS integration.
XCaaS stands for “Every Communication as a Service”, while CCaaS stands for “Contact Center as a Service”.
According to TipRanks, Bartus has achieved an average return of 86.2% per rating.
On April 19, the UK’s Secretary of State for Digital, Culture, Media and Sports announced that it would order an investigation into Nvidia’s takeover of chip designer Arm for $ 40 billion, citing national security concerns.
To make this decision, the foreign minister sought advice from officials from across the investment security community. Now the Competition and Markets Authority has until July 30th to prepare a report detailing any potential security or antitrust issues facing the nation related to the deal originally announced in September.
Hans Mosesmann from Rosenblatt Securities did not expect the British government to intervene. “This intervention comes as a surprise to us. Given ARM’s UK headquarters and ancestral foundations, it carries significant weight that could affect other major countries, including China, either vote or intervene against the deal,” the analyst said .
However, Mosesmann remains optimistic about Nvidia’s general outlook. Against this background, the five-star analyst has left its buy recommendation and target price of 800 USD unchanged. Given this price target, stocks could gain 30% over the coming year.
“We continue to like the Nvidia story, and despite this intervention, this doesn’t deter that the longer-term story of AI and accelerated computing is the way forward and the next cycle,” Mosesmann told customers.
Additionally, Nvidia just unveiled its Grace CPU, which is specifically designed to meet the computing needs of AI supercomputing, processing and recommendation systems.
With this in mind, Mosesmann remarked, “Our own position was that the deal was a 50:50 proposal, and given Grace’s sudden announcement last week, Nvidia’s Plan B CPU roadmap without the ARM acquisition is on the table . “
Mosesmann ranks 107th on TipRanks’ list of top performing analysts, achieving a success rate of 68% and an average return of 25.8% per rating.
The crypto trading platform Coinbase made its public market debut on April 14th via direct listing.
After BTIG analyst Mark Palmer began reporting on the stock the next morning with a buy rating and a price target of $ 500 (60% upside potential), he spoke to several institutional investors about COIN. Taking this feedback into account, the analyst repeated the rating and price target on April 18.
Palmer highlights the fact that some investors analyzed the company prior to going public and understood the various components of the platform, “but it became apparent that others were less aware of the company’s nontrading offerings, and particularly its institutional prime brokerage platform.”
Additionally, there are concerns that the retail rate of COIN will drop as other players try to gain market share by offering lower trading fees.
“Based on our discussions with investors, we believe that COIN’s progress in building a unique prime brokerage platform that focuses on institutional crypto investors has been largely overlooked and underestimated. This may be partly due to COIN’s decision to going public instead of a traditional IPO that would have been preceded by a full roadshow that could have highlighted its institutional capabilities, “wrote Palmer.
It should also be noted that Coinbase only announced the acquisition of the blockchain infrastructure and staking service provider Bison Trails on January 19.
Describing the implications of the deal, Palmer said: “We believe the acquisition has given the company a differentiated institutional offering. While Bison Trails was rarely mentioned in coverage of COIN’s direct listing, we believe it matters In providing scalable crypto plays, infrastructure and deployment provide an essential addition to the company’s custody services and other institutional offerings. “
Among the 160 top analysts surveyed by TipRanks, Palmer’s calls achieve an average return of 20.8%. In addition, its success rate is 66%.
According to Doug Anmuth, top JPMorgan analyst, Netflix will be “more controversial” after the first quarter and “could be tied to reach in the short term”. However, that doesn’t mean he’s joined the Netflix Bears.
Although Anmuth had lowered the target price from USD 685 to USD 600 (18% upside potential), he repeated a buy recommendation on April 21.
“Our overall view of NFLX isn’t changing – and we don’t think most will be – but on the fringes, there are likely to be growing concerns about the importance of hit content, competition, and overall visibility. Despite soft 1H net additions We’re encouraged by underlying metrics such as year-over-year engagement per household, year-over-year retention, and churn, which is already below pre-price levels in many markets, including the US, “said Anmuth.
For the first quarter in particular, net additions hit 3.98 million, well below the consensus estimate of 6 million. In addition, management’s forecast for 1 million net additions in the second quarter also missed the road’s 4 million call.
“NFLX does not believe the intensity of competition changed or made a significant contribution to light submarines in the first quarter as the deficit appeared in all Geos. However, we believe this may have marginally affected the acquisition expects all sub-growth to accelerate in 2H21, but management has stopped forecasting net 2H21 year-over-year growth and preferred to narrow comments to just a quarter, “commented Anmuth.
Furthermore, Anmuth mentions that there are risks associated with the pandemic. However, there is a risk that the pull-forward impact will persist, as opposed to changing user behavior when countries are reopened.
“We also believe the stock withdrawal will be attractive to some investors who are more focused on free cash flow and the buyback narrative and who are opportunistic about the net add-off sell-off,” added the analyst.
Anmuth ranks 72nd on TipRanks’ list with an impressive 69% success rate and an average return of 26.5% per review.