A silhouette of a woman wearing a protective face shield and protective face mask is seen near a Nike logo in a shopping mall.
Ajeng Dinar Ulfiana | Reuters
Investors rode through another volatile week, as all three major indices posted gains for the period.
For now, the markets seem to have shrugged off the fears that drove stocks down in the first place, but the real worries haven’t gone away. The war in Ukraine continues to shake Eastern Europe. Inflation is still high and rising fuel prices are hurting consumer finances.
Turbulent times are forcing investors to look beyond the headlines and focus on companies with strong fundamentals. Wall Street pros highlight companies they believe have long-term potential, according to Tipranks, which tracks top-performing analysts.
Here are five names to watch this week.
Bitcoin’s values have largely held steady over the past month, as have its heavily associated publicly traded mining companies like Riot Blockchain (RIOT).
Although the miner has been affected by the stagnation in bitcoin price over the past quarter, the company has continued to develop its infrastructure and build its vertical integration capabilities.
Recently, Darren Aftahi of Roth Capital Partners noted RIOT’s accelerating machine deployment rate, as well as its latest land purchases as reasons to expect future growth.
Aftahi priced the stock as a buy and assigned a price target of $46.
The analyst acknowledged Riot Blockchain’s underperformance against its most recent quarter results. However, he sees the drop in revenue as a direct result of not rolling out in December. Either way, he writes that this was just a “speed bump” and that the company should ramp up the deployment and its mining operations as RIOT’s infrastructure projects come online.
Additionally, Aftahi expects recently acquired infrastructure hardware provider, ESS Metron, to strengthen RIOT’s vertical integration. He added that he could “significantly increase total revenue given his nine-month trial revenue.” It will provide “priority access to infrastructure components at cheaper prices” to Riot Blockchain, the analyst said.
On TipRanks, Aftahi is ranked #378 out of nearly 8,000 expert analysts. It successfully priced stocks 38% of the time, and it returned an average of 32.1% on each one.
Russia’s war on Ukraine has prompted Western entities to start beefing up their cybersecurity in anticipation of renewed hacking activity.
The highly competitive cybersecurity space has several high-growth names ready to take off, including web infrastructure company Cloudflare (REPORT). The company accumulates new customers.
Shaul Eyal of Cowen wrote that “With its scalable, end-to-end cloud-native platform, NET is poised to disrupt the networking, security, and telecommunications markets.” These industries represent a calculated total addressable market of approximately $100 billion, and NET looks poised to take a sizable market share. (See Cloudflare’s estimated monthly visits on TipRanks)
Eyal priced the stock as a buy and declared a price target of $250. He said it was the highest valuation for a company’s expected FY23 revenue across all of its cybersecurity coverage.
Investors increasingly see the DDoS mitigation software company as a major player in its field. Cloudflare has generated about half of its revenue from large enterprise customers and is “ready to take on names like AWS,” according to Eyal.
Regarding the sanctions imposed on the Russian markets, the analyst wrote that NET has marginal exposure to losses there. Additionally, he commended the company for providing pro bono services to critical infrastructure such as hospitals, energy and water utilities in need.
Out of nearly 8,000 professionals in the TipRanks database, Eyal ranks 14th. He was correct 76% of the time when picking stocks and maintains an average return of 56.3% across his ratings.
Over the past two years, the retail industry has been plagued by lockdowns, supply and logistical constraints, and now rampant inflationary pressures that are weighing on consumer behavior. However, Nike (NKE) recently beat Wall Street consensus estimates for revenue and earnings per share. The company is also reorienting its wholesale activity to better adapt to new consumer trends.
This year, the sports footwear and equipment maker is experiencing demand that exceeds its supply and inventory. Nike has also expanded its partnerships in Chinese markets, as Guggenheim’s Robert Drbul noted in his recent report. (See Nike stock charts on TipRanks)
Drbul priced the stock as a buy and declared a price target of $195.
The analyst explained that China’s progress “will lead it into a new era of market transformation.” Additionally, despite declining year-over-year revenue in this market, Drbul said “Nike has the most innovative brand, platforms and product lineup” to succeed there.
In general, retail trade appeared to be encouragingly strong in the current environment. Drbul said Nike’s industry-leading position should provide it with enough leverage to invest and innovate more than its peers.
While short-term operational challenges remain, Drbul expects them to subside in the long term and for Nike to emerge stronger and more valuable than before.
Drbul ranks 111th out of nearly 8,000 analysts on TipRanks. He was correct at picking stocks 68% of the time, and he had an average return per rating of 27.9%.
Adobe (ADBE) recently released its quarterly results to mixed reception. However, despite its soft directions and slowing business trends, the company remains an industry giant.
Oppenheimer’s Brian Schwartz reports on the stock’s position, who noted that the company’s decent performance may improve as the year progresses, in part due to rising digital media prices. Additionally, the software company is seeing healthy demand and promising annual recurring revenue metrics.
Schwartz priced the stock as a buy and provided a price target of $560.
The analyst wrote that Adobe “stands out from almost any group as a pioneer in digital creative and marketing tools and services.” Additionally, he noted that the company has scaled into a “verifiable cloud platform success story as it is built on multiple product pillars of substantial scale, profit, and growth trajectory.” .
Out of nearly 8,000 analysts on TipRanks, Schwartz is ranked No. 20. His pass rate stands at 71% and he averaged 50.8% on each rating.
NVIDIA (NVDA) has been projected as one of the primary benefactors of the metaverse and global cloud transformation, and its valuation has reflected this.
Now that the stock has come down from its high prices of last November, the company looks much more attractive. This is the case even though its shares have recently rebounded.
Nvidia recently hosted its Investor Day conference, where its management highlighted the massive $1 trillion total addressable market the company intends to capture. NVDA has announced and released innovative products from its pipeline.
Vijay Rakesh of Mizuho Securities noted this in his recent report, adding that “NVDA’s new network portfolio supports its goal of delivering a complete end-to-end data center stack.” This stack includes “software, GPU, Grace GPU, Bluefield DPU (via Mellanox), and Switch,” Rakesh added.
The analyst rated the stock as a buy and calculated a price target of $345.
In addition, the company has also made considerable gains in the advanced driver assistance systems market, where its penetration is expected to grow from around 10% to 50% over the next eight years. Rakesh argues that this total addressable market could be worth up to $300 billion and represents a huge growth engine for the future. (See Nvidia hedge fund activity on TipRanks)
Out of nearly 8,000 expert analysts, Rakesh ranks 33rd. He was accurate when picking stocks 71% of the time, and he averaged a 47.9% return doing so.