These stocks are beating the odds and 'firing on all cylinders,' analysts say

Published Sat, Mar 12 20229:09 AM EST

Wall Street analysts named a slew of top best-of-breed stocks this week that they believe are poised to outperform amid the ongoing market volatility. These companies have strong management, outsized growth potential and are well-positioned for more upside. CNBC Pro combed combed through the best Wall Street research for stocks that are firing on all cylinders right now. They include: Porch Group , Disney, CrowdStrike , Bentley Systems and ZScaler. Disney Shares of Disney are down almost 15% this year, but Bank of America analyst Jessica Reif Ehrlich said there's a lot of to like about the entertainment giant. "Firing on all cylinders," she wrote earlier this week. The company reported first-quarter earnings in early February beating analyst estimates led primarily by the strength in its parks business. Ehrlich expects even more upside for Disney parks in the months ahead due to pent-up demand, enhanced technology and new attractions. In addition, Disney+ content is expected to ramp up and the firm is betting on an influx of additional subscribers in the second half. "Exiting FY22, we believe DIS will be positioned, for the first time since the pandemic, to have both key operating segments running at or near full potential," she wrote. Ehrlich acknowledged that the stock underperformed in the second half of 2021, but says now that the risk/reward is extremely attractive and just too hard to ignore. Bentley Systems The software engineering infrastructure company is also "firing on all cylinders," investment bank RBC said earlier this month after Bentley reported strong fourth-quarter earnings. The firm said Bentley remains well-positioned to capitalize on the increasing move to invest in more infrastructure spending. "While we continue to view the macro-environment as uneven, we believe mega-trends around the replacement of aging infrastructure as well as the growing emphasis on ESG remain multi-year tailwinds," analyst Matthew Hedberg wrote. In addition, Bentley could be a key beneficiary of geopolitical turmoil, according to the firm. Hedberg wrote that "we believe there could be an incremental benefit from higher energy prices, as we note the company's exposure of only ~1% to Russia/Ukraine conflict." Meanwhile, shares are down 24% this year, but Hedberg said investors should be impressed by the "consistency of the low-double digit growth trajectory," and buy the dip. "We believe upside to estimates remains likely from better-than-expected industry tailwinds," he added. CrowdStrike Wall Street analysts are doubling down on shares of the cybersecurity tech company after its blowout earnings report earlier this week . CrowdStrike beat on both the top and bottom line leading DA Davidson analyst Rudy Kessinger to declare that significant upside still remains. Even more impressive revenue growth accelerated for the second quarter in a row, Kessinger wrote. Additionally, cloud security remains a major opportunity for the company and CrowdStrike continues to accumulate enterprise customers, according to the firm. "We believe CRWD continues to warrant a premium over peers in light of their flawless execution, premium growth rate, best-of-breed product portfolio, and massive end markets," he wrote. Kessinger also said the company is a key beneficiary of the situation in Russia and CrowdStrike's pipeline of products is one of the strongest in its history. "The company is firing on all cylinders and heightened concerns over state sponsored cyberattacks in light of the Russia-Ukraine conflict could serve as an incremental demand driver in FY23," he added. Shares ended the week up 6.4% Porch Group - Loop Capital, Buy rating "Things appear to be firing on all cylinders at Porch, with management sounding as confident as ever that they have found the right customer access model for penetrating the underserved home services market through a repeatable model of recurring subscriptions and transactional referral fees on its low-priced software products, which gives the company early access to homebuyers so they can be among the first to assist homebuyers with purchase decisions around moving." ZScaler- Canaccord, Buy rating "We believe Zscaler is a core centerpiece of a robust cybersecurity framework and expect broader adoption to drive sustained 30%+ top-line growth. The company is poised to continue to gain share as a longterm disruptive technology, and we view the stock as a core long-term holding. ... .Impressive 59% billings growth against tough 71% comps. ... .We believe the 46.5% billings growth guidance will likely prove conservative given business momentum firing on all cylinders." Disney- Bank of America, Buy rating "Firing on all cylinders.After a 2 year COVID-19 driven drag, theme parks came roaring back in FY1Q22 (December quarter) with operating income nearly reaching FY1Q20 levels. ... ."Exiting FY22, we believe DIS will be positioned, for the first time since the pandemic, to have both key operating segments running at or near full potential." Bentley Systems- RBC, Outperform rating "Firing on all cylinders. ... .While we continue to view the macro-environment as uneven, we believe mega-trends around the replacement of aging infrastructure as well as the growing emphasis on ESG remain multi-year tailwinds. We remain impressed by the consistency of the low-double digit growth trajectory & margin expansion coming out of the pandemic. In the near-term, while EPC has remained under pressure, we believe there could be an incremental benefit from higher energy prices, as we note the company's exposure of only ~1% to Russia/Ukraine conflict." CrowdStrike- DA Davidson, Buy rating "Net new ARR growth accelerated for the second straight qtr. ... .We believe CRWD continues to warrant a premium over peers in light of their flawless execution, premium growth rate, best-of-breed product portfolio, and massive end markets. ... .The company is firing on all cylinders and heightened concerns over state sponsored cyberattacks in light of the Russia-Ukraine conflict could serve as an incremental demand driver in FY23,"

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Wall Street analysts named a slew of top best-of-breed stocks this week that they believe are poised to outperform amid the ongoing market volatility.