Earnings season is drawing to a close, and companies have offered investors and analysts insight into their plans for growth in the coming quarters.
For a number of firms, this has been an opportunity to showcase how they're adapting to new realities, be it the growing popularity of electric vehicles or the unrelenting demand for semiconductor chips.
To that effect, some of Wall Street's top analysts have highlighted these five companies that have attractive long-term prospects for investors, according to TipRanks, which tracks the best-performing stock pickers.
The green tidal wave has continued its rampage across the industry, with multiple names going public to huge valuations many have found difficult to stomach. While it may be more convenient for smaller more flexible pure-play electric vehicle (EV) companies to focus on their condensed product offerings, General Motors (GM) does not intend to be left behind. (See General Motors Stock Analysis on TipRanks)
Daniel Ives of Wedbush Securities reiterated his bullish hypothesis on the stock, arguing that the company is just now garnering recognition by Wall Street for its grand plans. He wrote that the "growing EV appetite among investors for new innovative EV stories, the vertical integration capabilities of GM and conversion of its massive customer base to electric vehicles over the coming years represents a transformational opportunity."
Ives rated the stock a Buy, and assigned a bullish price target of $85.
The analyst added that if near-term issues such as the global chip shortage and the recall fallout on the Chevy Bolt can be mitigated, the company will have a clear runway to doubling its revenue by 2030. Ives expects that if GM executes on its EV promises, the share price could move even higher than his target.
Big plans aren't the only thing in GM's toolbelt, as it has developed "game changing" Ultium battery technology, which Ives believes will help capture market share. However, he does not foresee Tesla (TSLA) falling from its dominating perch over the nascent industry.
Additionally, GM has been developing software-and-services subscription packages to accompany its strong pipeline of EVs. Ives is encouraged by the prospect of the vast array of opportunities for monetization in this field 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 rates Ives as No. 22. His ratings have been successful 82% of the time, and have returned him an average of 64.3% per.
Web development company Wix (WIX) hit a rough patch over the first half of the year, as it was up against tough comparisons from 2020's boom in online business and e-commerce which helped bring in high valuations for the stock. Those tough times seem to be in the rearview mirror for Wix, according to Mark Mahaney of Evercore ISI. "It turns out that the world didn't decide to stop building websites," he said.
(See Wix.com Risk Factors on TipRanks)
Mahaney rated the stock a Buy, and assigned a price target of $255.
The analyst noted the company's recent strong earnings report, in which it printed a beat on revenue and improved metrics in key sectors. He said that newly acquired users, average revenues per user and conversion levels were each beyond expectations laid out by the company.
Global shifts during the Covid-19 pandemic turned having an online footprint "a must-have rather than a nice-to-have for businesses globally," Mahaney said. He was encouraged by Wix's exposure to the worldwide ecommerce sector, adding that he believes the company's "omnichannel strategy with the additional kicker of gross payment volume expansion (esp. as the world reopens) should allow Wix to fully participate in the double tailwind of business going online, and commerce going digital."
Anticipating additional future upside, Mahaney said that about half of the company's customers operate in fields which may still be restricted due to Covid-19. Upon a relaxing of pandemic related constraints, Wix could see a positive jolt to its balance sheet.
TipRanks has calculated Mahaney as No. 62 out of over 7,000 financial analysts. Of his ratings, 74% have been successful, and they have returned him 57% on average.
As the hotly contested streaming wars continue, Netflix (NFLX) has been investing in innovations beyond its strong entertainment pipeline. The production and streaming service company has officially released several mobile games as it expands into an entirely new category of content. Doug Anmuth of JPMorgan stated that "NFLX remains a top pick" and that he expects the fourth quarter to bring success for the streaming giant. (See Netflix Hedge Fund Activity on TipRanks)
Anmuth was enthusiastic "on shares based on continued strengthening of the 4Q content slate, greater distance from pandemic pull-forward, improving seasonality, & potential for greater traction in APAC, where NFLX has low penetration."
The analyst rated the stock a Buy, and decided on a price target of $750.
In addition to the significant upcoming TV shows and movies set for the last quarter of this fiscal year, Anmuth noted that long-term upside can also be found in Netflix's plans for share repurchases. The company is also benefitting from the "global proliferation of Internet-connected devices," as consumer attention turns away from traditional cable and satellite TV options.
Anmuth is confident that Netflix can continue penetrating high potential markets, such as China. Overall, NFLX's content has been popular worldwide and a "virtuous circle" of subscriber and revenue growth is expected to carry the company to higher valuations.
Out of over 7,000 financial analysts, TipRanks has calculated Anmuth to be No. 112. His stock picks have been correct 69% of the time, and have returned an average of 40.9%.
Despite persisting inflationary fears, consumer spending has continued to climb. This is good news for Square (SQ), which generates revenues from transactions through its subscription-based payment hardware and software platforms. The company has made inroads toward several other strategic business endeavors, including expansion into full-fledged fintech services, cryptocurrency initiatives, and high-profile acquisitions. (See Square Website Traffic on TipRanks)
Ivan Feinseth of Tigress Financial Partners detailed his bullish hypothesis on the company, writing that "SQ's innovative capabilities will continue to drive the introduction of new products that take it beyond the payment and continue to drive growth, increasing Return on Capital, greater Economic Profit, and accelerating shareholder value creation."
Feinseth rated the stock a Buy, and raised his price target to $310 from $295.
The analyst explained that Square has now acquired "buy now, pay later" firm Afterpay, as well as Credit Karma Tax in its effort to transition into a more well-rounded fintech company. The firm has been moving its banking services in-house, which is anticipated by Feinseth to increase its overall margins. Moreover, these acquisitions are expected to provide for increased integration of sellers and consumers across its ecosystem of platforms.
The broad consumer shift toward contactless payment preferences has supported Square as of late, allowing the company to report strong third-quarter revenues.
Feinseth stands at No. 52 out of more than 7,000 analysts in TipRanks' database. He retains a success rate of 76% on his stock picks, and has returned an average of 38.8% on each one over the prior two year period.
The semiconductor shortage is throwing sawdust into the engines of several industries, notably the automotive and smartphone manufacturing sectors. Meanwhile, some of the firms which design the chips are seeing impressive earnings and revenue amid the heightened demand. Nvidia (NVDA) recently printed yet another quarter of exceeded estimates, and analysts do not expect it to slow down any time soon. (See Nvidia Earnings Date & Reports on TipRanks)
One of those bullish professionals is Christopher Rolland of Susquehanna Financial Group, who wrote that NVDA saw a record quarter across at least two of its main end-markets: data center and gaming. He added that the growth in the former is expected to continue performing well into the fourth quarter. According to the analyst, "Data Center was driven by hyperscalers for cloud computing, natural language processing, and deep recommender models, while Enterprise continues to be driven by vertical industries."
Rolland rated the stock a Buy, and provided a price target of $360.
The tech company is also experiencing high demand for its networking solutions, with "higher momentum for their ethernet [network interface controllers], Quantum 2 switches, and Bluefield 3 [data processing units]."
While the firm's gaming segment remained productive this past quarter, Rolland said that the industry's growth itself is difficult to predict. However, the company's graphics processing unit, or GPU, inventory could still benefit from an increase in its supply. This instance is anticipated by Rolland as a potential future tailwind come 2022.
Rolland remained confident in NVDA, and views it as a "pure and levered way to invest in the future prospects of the GPU, a device we believe is undergoing a renaissance."
TipRanks rates over 7,000 analysts, and currently places Rolland at No. 6. His stock ratings have been successful 87% of the time, and have returned an average of 56.9% each.