As the third quarter results roll in and 2021 draws to a close, analysts and investors are researching which companies can end the year on a bullish note.
Many businesses have had a remarkable start to the year and are in a difficult position to continue to grow at such a rapid pace.
Costco has braved the economic storm of the pandemic, but can it continue to drive exponential growth in memberships and sales? Cloud computing solutions companies like Zscaler have taken off from the changing labor trends, what might its outlook be as economies continue to reopen?
Meanwhile, the semiconductor shortage has taken its toll on automakers and smart electronics production, but analysts believe General Motors and Sonos will both be able to come out of this with long-term gains. term. A chipmaker itself, Marvell is expected to see continued high demand as well as accelerated business performance.
Top analysts have high expectations for these five stocks, according to TipRanks, which tracks top-performing stock pickers.
Who can resist the free samples? Not many people apparently, as membership renewal rates are at record highs at Costco (COST). The big box retailer posted another impressive round of monthly earnings, with positive metrics on sales, market share and international expansion. (See Costco Risk Factors on TipRanks)
Peter Benedict of Robert W. Baird presented his bullish assumption on the company, noting that “when combined with their loyal membership base, the accelerating growth profile of MFIs and a defensive sales mix, COST remains a rare mega-cap grassroots growth idea ”.
Benedict reiterated his buy rating on the stock and gave it a price target of $ 520.
The five-star analyst explained that even with difficult report comparisons from previous months, Costco continues to beat Wall Street consensus estimates. The most powerful departments in the business have been gasoline, foodservice offerings, optical services, and the Costco pharmacy.
Costco has invested resources to position itself more as a convenience retailer. These initiatives include improved functionality for its digital platforms, as well as a more vertically integrated logistics delivery system. As e-commerce trends continue to climb, Costco remains relevant to consumers.
Internationally, Costco clubs generate more profit than those located domestically. The company is focused on expanding its overseas presence, which will provide it with a more diverse source of income.
On TipRanks, Benedict maintains a ranking of 235th out of more than 7,000 analysts. His stock choices resulted in an 82% success rate and provided an average gain of 56.6% per score.
Driven by increasing demand and supply chain challenges, the semiconductor shortage has affected the smartphone and auto industries for longer than expected. Meanwhile, companies that produce the chips themselves, such as Marvell Technology Group (MRVL) are experiencing high demand and are moving towards the adoption of cloud-optimized silicon. (See Marvell Blogger Sentiment on TipRanks)
Quinn Bolton of Needham & Co., who spoke of its advantageous positioning, said Marvell had “one of the highest growth rates for semi-large caps”. Its long-term revenue expansion expectations could potentially exceed its usable market, which is also expected to grow by around 50% over the next four years.
The five-star analyst rated the stock as a buy and raised its price target to $ 75 from $ 69 previously.
Marvell’s 5G, data center, operator and automotive semiconductor segments accelerate market share gains. Meanwhile, Bolton believes in the chipmaker’s ability to capitalize on the transition to cloud-optimized silicon. He explains the technology as a combination of “compute, networking, storage, security and electro-optics elements integrated or packaged to provide optimal performance and cost for specific cloud and cloud applications. ‘infrastructure’.
Bolton argues that Marvell is an “ideal partner” for enterprise-level cloud and network infrastructure companies that still outsource chip production. Given his wide range of opportunities, he views Marvell as a staple of any investor’s semiconductor portfolio.
Financial aggregator TipRanks maintains Bolton number 1 out of over 7,000 total expert analysts. He was successful 83% of the time when rating actions, and his choices allowed him to achieve an average 82% return on each note.
There are the automakers, then there are the disruptive electric vehicle (EV) technology companies. The green tidal wave of traditional combustion engines will drag auto companies with it to profit shores, or take them away. For the senior management of General Motors (DG), the latter is not an option. The company recently presented its promising roadmap to orient its product line towards electric vehicles and ultimately increase its speculative value.
Daniel Ives of Wedbush Securities said he is convinced that “the mainstay of Detroit is in the midst of a massive turnaround that will change GM’s history going forward.” He sees a bright decade for the large-cap automaker and expects it to largely dominate the emerging $ 5,000 billion addressable electric vehicle market. (See General Motors stock analysis on TipRanks)
Ives rated the stock as a bullish buy and gave it a price target of $ 85.
The five-star analyst admitted that negative sentiment persists among investors in the Chevy Bolt saga. Additionally, the global chip shortage is causing persistent headwinds for GM. However, he only sees them as short-term hurdles that will inevitably be ironed out by the inevitable electric vehicle revolution.
Beyond vehicle manufacturing, Ives expects GM to offer software and service subscriptions for autonomous and assisted driving plans, providing recurring revenue. The “potential gold mine” of monetization opportunities has been calculated by the analyst to ultimately result in approximately $ 2,000 in additional revenue per car sold.
General Motors has the potential to switch at least half of its customers to electric vehicles by the end of the decade. All that remains for the company to do is to execute its multi-year plan.
Out of more than 7,000 expert analysts, Ives is ranked 9th by TipRanks. His grades were correct 77% of the time and are generating average returns of 54.7%.
It is not often that a well-rated analyst will write that he thinks “investors will be rewarded for buying and holding these stocks.” However, Zscaler (ZS) achieved this feat. The company has grown by investing aggressively in its sales department and is focused on improving productivity in this area. (See Zscaler insider trading activity on TipRanks)
Alex Henderson of Needham & Co. praised the company, saying its platform and strategy are poised for long-term victories against the competition. Throughout Covid-19, many businesses and large corporations have shifted their operations to cloud-based solutions. Zscaler has seen its growth accelerate and must now continue to perform.
Henderson valued the stock as a buy and scored a price target of $ 345.
As his earnings comparisons remain hard to beat, Henderson noted that the stock could see consolidation in the near term. In addition, the company is currently increasing its spending on business travel in order to secure sales agreements.
Despite these acute factors, he sees huge market outperformance in the long term of Zscaler’s security offerings, that is, once operating leverage and investment growth equalize.
Henderson is ranked No. 87 out of over 7,000 professional analysts. TipRanks calculated that its ratings were successful 68% of the time and led to average returns of 41.6%.
Legal battles over intellectual property rights can result in lucrative court settlements, especially when a small business challenges a tech giant. Back in early 2020, Sonos (SO NO) accused Alphabet (GOOGL) infringement of a series of patents. In mid-August, a judge sided with the smart speaker company, but after a counter action, a short-term settlement seems unlikely. A subsequent sale of Sonos shares resulted in a discounted but fundamentally healthy share.
Brent Thill of Jefferies Group identified this attractive buying opportunity in his recent share report, writing that he believes the valuation is now too low and the Wall Street consensus believes its guidance is cautious. (See Sonos Hedge Fund Trading Activity on TipRanks)
Thill valued the stock as a buy and added a price target of $ 50.
At the time of going to press, the speaker company has seen its shares fall about 20% from their highs in late August. While Thill does not foresee a short-term solution to the dispute, long-term play could be boosted by a positive outcome down the road.
The five-star analyst believes in the company’s financial momentum, adding that “We believe SONO will continue to benefit from OPEX leverage from higher sales volume, and believe its backlog. orders will allow it to achieve greater sales and marketing efficiency. In addition, the recent price increases of its products should act as an increase in income.
Sonos’ cautious forecast could allow for an easy beat and an increase in earnings season. One of the main factors in this regard would be the company’s ability to fulfill its order backlog and its ability to balance its supply against strong demand.
Thill’s only caveat about declining valuation was the difficulty of catching a falling knife. Once stocks start to stabilize around a support level, he would expect an excessively reactionary sell-off.
TipRanks ranked Thill 129th out of over 7,000 other financial analysts. Thill passed his grades, achieving a 69% pass rate and returning an average of 36.9%.