Visitors browse the Expedia display during the International Tourism Trade Fair in Berlin.
Fabrizio Bensch | returns
Geopolitical tensions, the prospect of interest rate hikes by the Federal Reserve and inflation fears have shaken the stock market and unsettled investors.
Major indices have just suffered losses for the second week in a row and the conflict between Russia and Ukraine continues to brew.
Investors are looking for guidance and a reminder to maintain a long-term perspective. Top analysts are naming their favorite picks even in these turbulent times, according to TipRanks, which tracks top-performing analysts.
Here are five stocks that these Wall Street professionals highlight.
cloud flame (NET) is emerging as a standout player in cybersecurity. The company has been gaining customers and seeing retention rates increase, according to its recent earnings report. (See Cloudflare Earnings Data on TipRanks)
Alex Henderson of Needham & Co. wrote that Cloudflare’s “strong technology is capable of solving critical problems and enabling growing technology trends.” He said: “We recommend that investors buy and hold NET even with the interest rate and valuation turmoil. We are confident in this name.”
Henderson reiterated his buy recommendation for the stock and added a price target of $245 per share.
The analyst also highlighted Cloudflare’s strong earnings performance over the quarter, with revenue accelerating and expectations ahead of Wall Street’s consensus estimates. Henderson still believes the guidelines are conservative and prepared for easy revenue increases in the future.
The analyst wrote that he sees Cloudflare in a space of its own, which is currently “turning from network investments and a freemium customer capture model to developing deeper service functionality.”
Henderson is rated #66 by TipRanks among more than 7,000 analysts. He has successfully reviewed stocks 66% of the time, and he has returned an average of 35.3% on each.
The holiday season typically brings with it huge amounts of travel and vacation planning activity, but for companies like Expedia (EXPE), last year was different. The ommicron variant of Covid-19 sparked yet another wave of pandemic-related cancellations. However, the stock now appears poised for a strong summer ahead.
That’s the view of Wells Fargo’s Brian Fitzgerald, who predicts demand for the travel booking company will recover as fears of ommicron subsides. In addition, the company recently posted encouraging quarterly results despite the hiccup in travel at the end of 2021. (See Expedia website traffic at TipRanks)
Fitzgerald assessed the stock as a buy, and raised his price target bullishly from $225 to $250.
Although the number of cancellations increased during the holiday season, they were not enough to overwhelm the company’s financial position. In addition, the wave had less of an impact on Expedia than the earlier delta variant. This could help calm investor hesitation about the stock if the pattern continues.
Confident in his tone, the analyst wrote that “EXPE remains our game of choice for the online travel industry’s recovery.” He believes summer can be lucrative, especially for international travelers and city travelers.
It is important to note that uncertainty caused by Covid-19 can still cause EXPE to exhibit short-term volatility. Fitzgerald noted, however, that the company has made significant progress “on key initiatives – streamlining brand strategy and technical platforms and accelerating the pace of innovation/execution.” Expedia is poised to ramp up its loyalty program and boost its long-term positive momentum, he added.
Out of more than 7,000 financial analysts, Fitzgerald ranks 105. His stock choices were correct 59% of the time, and he earned an average return of 41.1% on each.
coursera (COUR), the online adult education course platform, went public last year during the pandemic but has since fallen in price. However, margins are promising and the company continues to scale its operations.
Stifel’s Scott Devitt recently referred to Coursera’s quarterly results, in which the company beat Wall Street’s consensus estimates on its revenue and outlook for 2022. The analyst attributed high Coursera Plus subscriptions and “increased demand for career-oriented certificates and specializations” as some of the reasons for the higher margins.
Devitt assessed the stock as a buy and raised his price target from $25 to $26.
Writing about the current shift to Coursera’s offerings, Devitt noted that management indicated that “confidence is growing that the shift to cheaper content from industry partners is unlikely to return in any meaningful way given current trends, which is material upside to the company’s long-term gross margin potential.”
In addition to this macro trend, Coursera sees its users more attracted to the content from partners with a higher margin than the more expensive content for teachers. (See Coursera stock charts on TipRanks)
Despite minor challenges, such as the more employee-privileged job market that draws potential users away from Coursera, the company’s overall addressable market remains strong and its industry leadership position is stable.
Devitt ranks above more than 7,000 expert analysts on TipRanks and comes in at number 356. He has had success with his stock ratings 52% of the time and has averaged 24.1% per rating.
Intel (INTC) is the largest semiconductor company in terms of revenue, although it has fallen behind other major companies in the complexity of its chips. The company has expanded its infrastructure and business model since its new CEO took over the reins about a year ago and recently announced it would buy chipmaker Tower Semiconductor.
Quinn Bolton of Needham & Co., wrote in a report that the deal is valued at approximately $5.4 billion and includes “a wide range of specialized process nodes to [Intel Foundry Services] that complement Intel’s advanced node process capabilities.” (See Intel Dividend Data at TipRanks)
Buying Tower will add seven manufacturing plants to Intel’s manufacturing capabilities, as well as an “established foundry ecosystem” and a pre-existing customer base, the analyst wrote.
Bolton assessed the stock as a buy and set a price target of $60 per share.
Intel is undergoing a major transformation of its business model. The long-term outlook is promising, despite Intel’s near-term challenges of tight gross margins due to heavy infrastructure and M&A investments.
Out of TipRanks’ 7,000-plus analyst database, Bolton ranks #2. He has successfully assessed stocks 79% of the time. On average, he returned 82.5% on each.
As oil and gas prices continue to rise, the application of alternative energy sources becomes more apparent. sun edge (SEDG) recently posted quarterly results and is currently experiencing strong demand.
Some of the greatest demand for SolarEdge’s photovoltaics is in Europe, which according to JPMorgan’s Mark Strouse “is particularly strong as enterprise-level clean energy targets, government initiatives and rising fossil fuel prices have boosted demand.” (See SolarEdge Risk Analysis on TipRanks)
Strouse assessed the stock as a buy and stated a price target of $328.
The analyst said SolarEdge’s commercial and industrial business segment will soon reach a turning point and experience strong demand. He also expects SEDG’s tight gross margins to increase once the company ramps up production in Mexico, which will significantly reduce transportation costs. This is in contrast to the high costs involved in shipping from Asia to the US
Meanwhile, in Asia, production at the Vietnam plant is recovering after pandemic-induced forced shutdowns stifled progress.
Strouse said once the stock expands its vertical capabilities and global reach, it could really outperform its solar competitors.
Out of more than 7,000 expert analysts, Strouse ranks 399. He’s been right 52% of the time in choosing stocks, and has returned an average of 40.3% on each.