From e-commerce-driven pet healthcare, to cybersecurity, to online sports gaming, upside potential lies in many sectors of the stock market.
Financial data aggregator TipRanks compiles expert analysts' ideas about the capital markets. Some of the industry's best have recently spelled out their bullish theses on five stocks, which touch on different categories in the world of publicly tradable companies.
Let's take a look at what the best-performing analysts have to say about these stocks and industries within the current market environment.
The combination of the shift toward cloud-based computing solutions and several high profile cyber-related breaches over the past year have driven security companies to high valuations. CrowdStrike (CRWD) is no outlier, as it printed "superb" earnings recently after a strong second quarter, as Alex Henderson of Needham & Co. wrote. He added that CRWD beat his expectations "across the board."
Henderson reiterated a buy rating on the stock, and raised his price target from $335 to $340.
After several large customer wins, the analyst remains confident that the company can continue to ink lucrative deals, and at increasing frequencies. Furthermore, he noted that customer retention is healthy, and that customers have been acquiring increasingly larger numbers of CrowdStrike's modules.
The five-star analyst is highly bullish on the stock, stating his belief that its "platform design gives it a substantial AI, automation, efficacy, and scalability advantage versus competitors." He said that CrowdStrike can easily grow organically or inorganically and bring value to its shareholders and customers.
In addition to beating on earnings and guidance, the cybersecurity firm exceeded subscription customers quarter-over-quarter and has a confidence-boosting pipeline. Henderson added that the company recently signed a deal with Verizon for its Falcon suite software.
The analyst wrote that due to CrowdStrike's strong business performance, he thinks "investors will be rewarded for buying and holding onto these shares."
On TipRanks, Henderson is ranked as #35 out of over 7,000 analysts. He has a strong success rate of 71% on his ratings, with an average return per rating of 30.6%.
As individuals were dissuaded from shopping in retail stores during the Covid-19 pandemic, ecommerce companies boomed. While they were stuck at home, many acquired new pets. Pets are considered an annuity, and require recurring care. When coupled with pet pharmacy services from Chewy (CHWY), this translates into customer retention.
Brian Fitzgerald of Wells Fargo writes that Chewy's Petscriptions platform could "drive improved health-care compliance among pet parents and multiple potential revenue opportunities for CHWY and its health-care partners over time." The suite of tools has been helping veterinary clinics drive up revenues and optimize their customers' experiences.
Fitzgerald maintained his bullish buy rating on the stock and declared a price target of $110.
Although Chewy has been extending its operating expenses by investing in fulfillment centers and marketing, the analyst still sees upside as the company innovates and executes on its endeavors. Furthermore, despite a slight deceleration in customer growth year-over-year, Chewy's net sales per active customer increased by the largest margin "in company history on an absolute customer basis."
The five-star analyst also mentioned that newly acquired customers spend more initially and have higher rates of spending throughout their engagement with the company.
On TipRanks, out of more than 7,000 financial analysts, Fitzgerald is ranked as #36. He has a success rate of 72% on his stock ratings, and returns an average of 33.4% per rating.
Fallout from the global semiconductor shortage has affected several key industries, notably automotive firms and smartphone producers. For chip designers, this has led to competitive demand outpacing current supply levels. That is true for Qualcomm (QCOM), which has been positioning itself well for long-term revenues by inking large deals and pushing to catch up with demand.
Vijay Rakesh of Mizuho Securities wrote that the firm has been employing multi-sourcing strategies to equalize its supply of chips. Moreover, Qualcomm's recently closed deal with Chinese tech company HONOR is expected to provide ample upside, especially when factoring in opportunities for a multimedia ramp-up toward the 2022 Beijing Winter Olympics.
Rakesh again placed a buy rating on the stock, and he reiterated his bullish price target of $180.
Beyond smartphone processors, the five-star analyst sees room for growth in radio-frequency front-end market share, as well as for personal computers, notebooks, and automotive. Qualcomm recently completed an acquisition of CPU producer Nuvia, from which Rakesh forecasts long-term revenues, starting 2023 to 2024.
Calling it the "gorilla in the room," the analyst does not foresee serious short-term damage from Apple's plans to insource its iPhone processors. He expects the tech retailer to phase in the in-house chips to its lower end phones first, and perhaps the higher-end products later on. The early stages of this "challenging transition" would begin in 2023.
On TipRanks, Vijay Rakesh is ahead of the curve, rated #89 out of over 7,000 professional analysts. His success rate stands at 68%, and his collective ratings have brought in an average return of 26.7%.
Among the winners over the last year and half, video and television streaming services and online sports betting companies have seen considerable growth. One firm in particular is attempting to bring the two together. FuboTV (FUBO) has been betting on this move, and its efforts show that it is on the right path.
Darren Aftahi of Roth Capital Partners wrote that the television streaming service has "made two key strides in the pending launch of its sportsbook." Those two include regulatory successes as well as an upcoming trial run of its new platform.
Aftahi rated the stock a bullish buy, and declared a price target of $45.
The five-star analyst explained that FuboTV had recently won regulatory approval in both Iowa and Arizona for mobile sportsbook gaming. This development is considered a significant step toward potential upside for the firm, as these are the first states to approve FuboTV's requests. The company's gaming platform is currently pending regulatory approval in three other states.
In order to meet its fourth-quarter release timeline, FuboTV has been running trials of its live sports streaming service in tandem with a "free-to-play" and FanView gaming experience, the next of which is slated to be tested throughout September. These beta tests are intended to prove its concept platform of integrated gaming with streaming, and to optimize user engagement.
Aftahi is confident this new concept can offer the company several innovative ways to monetize and differentiate its platform, as well as to "create a flywheel for subscriptions and engagement."
On TipRanks, Aftahi maintains a ranking of #140 out of over 7,000 expert analysts. He has a success rate of 50%, and an impressive average return of 39.1% per rating.
Multinational software developer Autodesk (ADSK) recently held its annual investor day, where it outlined several developments that piqued analyst interest. Current or upcoming transitions in billing strategy, digitalization of its products, and a move to a more subscription-based model provided Matthew Hedberg of RBC Capital with enough evidence to reiterate his bullish thesis.
Hedberg rated the stock a buy and provided a price target of $363.
Autodesk also used the investor day platform to state its free cash flow targets for 2023, which the analyst called "bullish" and expects to be met. His optimism is due in part to the shift in billings policy that the company is undertaking.
In regards to this shift, Hedberg elaborated that ADSK plans to change multi-year paid upfront contracts into ones which pay out on a yearly basis. While he expects this move to cause volatility in the company's free cash flow in the short-term, it should stabilize positively around fiscal year 2025 or 2026. This makes the stock particularly more attractive for a long-term play.
The analyst touched on the multi-year digitization transition, explaining that he is encouraged that the company's move to "harden the system has essentially eliminated non-compliant users of the current product." Furthermore, throughout the pandemic, 75% of new go-to-market customers were direct.
On TipRanks, the site ranks Hedberg out of more than 7,000 analysts, placing him at #7. His ratings have netted him a success rate of 82% and an average return of 39.3%.