The new GM logo is seen on the facade of General Motors headquarters in Detroit, Michigan, March 16, 2021.
Rebecca Cook | Reuters
The earnings season is drawing to a close and companies have offered investors and analysts a snapshot of their growth plans over the next few quarters.
For a number of companies, it was an opportunity to show how they are adapting to new realities, whether it is the growing popularity of electric vehicles or the relentless demand for semiconductor chips.
To that end, some of Wall Street’s top analysts have highlighted these five companies that present attractive long-term prospects for investors, according to TipRanks, which tracks top-performing stock pickers.
The green tidal wave continued to wreak havoc on the industry, with several names made public at huge valuations that many struggled to digest. While it may be more convenient for small, pure and flexible electric vehicle (EV) companies to focus on their condensed product offerings, General Motors (DG) does not intend to be left behind. (See General Motors stock analysis on TipRanks)
Daniel Ives of Wedbush Securities reiterated his bullish assumption on the stock, saying the company has only just been recognized by Wall Street for its big plans. He wrote that “the growing investor appetite for new stories of innovative electric vehicles, GM’s vertical integration capabilities and the conversion of its vast customer base to electric vehicles over the next few years represent a transformational opportunity.”
Ives rated the stock as a buy and gave it a bullish price target of $ 85.
The analyst added that if near-term issues such as the global chip shortage and the fallout from the Chevy Bolt recall can be mitigated, the company will have a clear path to doubling revenues by 2030. Ives’ expects that if GM delivers on its EV promises, the stock price could move even higher than its target.
Big projects aren’t the only thing in GM’s tool belt, as it has developed “shifting” Ultium battery technology, which Ives says will help capture market share. However, he does not plan for Tesla (TSLA) falling from its dominant perch on the nascent industry.
Additionally, GM has developed software and service subscription packages to support its strong pipeline of electric vehicles. Ives is encouraged by the prospect of the vast array of monetization opportunities in this area for GM, noting that up to $ 2,000 per car per year could be generated.
Out of more than 7,000 analysts, financial aggregator TipRanks ranks Ives 22nd. His grades were positive 82% of the time and earned him an average of 64.3% per person.
Wix Web Development Company (WIX) had a rough time in the first half of the year as it faced tough comparisons with the boom in online business and e-commerce in 2020, which helped drive high valuations for the stock. Those tough times seem to be in Wix’s rearview mirror, according to Evercore ISI’s Mark Mahaney. “It turns out the world hasn’t decided to stop building websites,” he said.
(See Wix.com Risk Factors on TipRanks)
Mahaney rated the stock as a buy and gave it a price target of $ 255.
The analyst noted the company’s recent strong earnings report, in which it set a pace on revenues and improved metrics in key industries. He said newly acquired users, average revenue per user and conversion levels were each beyond the expectations stated by the company.
Global changes during the Covid-19 pandemic have made the online footprint “a must-have rather than an enjoyable one for businesses around the world,” Mahaney said. He was encouraged by Wix’s exposure to the global e-commerce industry, adding that he believed the company’s “omnichannel strategy with the added boost of gross payment volume expansion (especially at reopening the world) should allow Wix to fully participate in the double tailwind of business going online and commerce going digital. ”
Anticipating further future increases, Mahaney said about half of the company’s customers operate in areas that may still be restricted due to Covid-19. After a relaxation of the constraints related to the pandemic, Wix could see a positive shock to its balance sheet.
TipRanks calculated Mahaney as No. 62 out of more than 7,000 financial analysts. Of his marks, 74% were successful, and they gave him 57% on average.
As the hotly contested streaming wars continue, Netflix (NFLX) has invested in innovations beyond its strong entertainment pipeline. The production and streaming services company has officially launched several mobile games as it expands into a whole new category of content. JPMorgan’s Doug Anmuth said “NFLX remains a top pick” and that he expects the fourth quarter to be a success for the streaming giant. (See Netflix hedge fund activity on TipRanks)
Anmuth was enthusiastic “about actions based on the continued strengthening of the 4Q content roster, greater distance from the pandemic, improved seasonality, and the potential for greater traction in APAC, where NFLX has low penetration “.
The analyst valued the stock as a buy and decided on a price target of $ 750.
In addition to major upcoming TV shows and movies slated for the last quarter of this fiscal year, Anmuth noted that long-term benefits can also be found in Netflix’s stock repurchase plans. The company is also benefiting from the “global proliferation of Internet-connected devices,” as consumer attention shifts away from traditional cable and satellite TV options.
Anmuth is convinced that Netflix can continue to enter high potential markets, such as China. Overall, NFLX content has been popular around the world and a “virtuous cycle” of subscriber and revenue growth is expected to lift the company to higher ratings.
Out of over 7,000 financial analysts, TipRanks calculated Anmuth to be number 112. His stock picks were correct 69% of the time and returned an average of 40.9%.
Despite the persistence of inflationary fears, consumer spending continued to climb. This is good news for Square (SQ), which generates transaction revenues through its hardware and software subscription payment platforms. The company has made inroads into several other strategic business initiatives, including expansion into full-fledged fintech services, cryptocurrency initiatives, and large-scale acquisitions. (See Square Website Traffic on TipRanks)
Ivan Feinseth of Tigress Financial Partners detailed his bullish assumption on the company, writing that “SQ’s innovative capabilities will continue to drive the introduction of new products that go beyond payments and will continue to drive growth, increasing return on capital, greater economic profit, and accelerate the creation of value for shareholders.
Feinseth valued the stock as a buy and raised its price target to $ 310 from $ 295.
The analyst explained that Square has now acquired the company “buy now, pay later” Afterpay, as well as Credit Karma Tax in its efforts to grow into a more comprehensive financial technology company. The company has moved its banking services in-house, which should increase its overall margins according to Feinseth. In addition, these acquisitions should allow greater integration of sellers and consumers into its platform ecosystem.
The widespread consumer shift to contactless payment preferences recently bolstered Square, allowing the company to post strong third quarter revenue.
Feinseth is ranked 52nd out of more than 7,000 analysts in the TipRanks database. He maintains a 76% success rate on his stock picks and earned an average of 38.8% on each over the previous two-year period.
The semiconductor shortage is throwing sawdust into the engines of several industries, including the automotive and smartphone manufacturing sectors. Meanwhile, some of the companies designing the chips are seeing impressive profits and revenues amid increased demand. Nvidia (NVDA) recently released another quarter of the outdated estimates, and analysts don’t expect it to slow down anytime soon. (See date and Nvidia earnings reports on TipRanks)
One of those upbeat professionals is Christopher Rolland of Susquehanna Financial Group, who wrote that NVDA had a record quarter in at least two of its main end markets: data centers and games. He added that growth in the first is expected to continue to perform well in the fourth quarter. According to the analyst, “the data center has been driven by hyperscalers for cloud computing, natural language processing and deep recommendation models, while the business continues to be driven by verticals.”
Rolland rated the stock as a buy and provided a price target of $ 360.
The tech company is also seeing strong demand for its networking solutions, with “greater momentum for their Ethernet.” [network interface controllers], Quantum 2 and Bluefield 3 switches [data processing units]. ”
While the company’s gaming segment has remained productive over the past quarter, Rolland said growth in the industry itself is difficult to predict. However, the company’s graphics processing unit, or GPU, inventory could still benefit from an increase in its offering. This instance is anticipated by Rolland as a potential future tailwind in 2022.
Rolland has remained confident in NVDA and sees it as “a pure and efficient way to invest in the future of the GPU, a device which we believe is in the midst of a renaissance”.
TipRanks rates over 7,000 analysts and currently ranks Rolland at No. 6. His stock quotes have been successful 87% of the time and have returned an average of 56.9% each.