Markets hit all-time highs as companies face inflationary pressures and labor shortages, but investors need to take a long-term perspective when choosing stocks.
The earnings forecasts for the coming quarters give investors and analysts an insight into the future of companies.
To that end, top Wall Street analysts have identified these five companies as long-term winners, according to TipRanks, which tracks the top performing stock picks. Here’s how these stocks are expected to perform over the course of the year.
When enterprise-level business infrastructure moves to the cloud, companies helping it manage and secure it fill the void. Data dog (DOG) has had an impressive run and an “exceptionally strong” third quarter since going public in 2019, according to Jack Andrews of Needham & Co. The company recently reported quarterly beats across the board.
Andrews rated the stock a Buy and raised its price target from $ 173 to $ 236.
He wrote that DDOG’s third quarter performance was “outstanding” and that “the company arguably represents the strongest fundamental story in all of enterprise software”. Andrews believes the company is doing well with its current offerings and is converting more new customers to multiple products in its suite.
The analyst said more customers order more services from quarter to quarter, a direct result of DDOG’s rapid product innovation. The company has released new platforms such as the Cloud Security Posture and Cloud Workload Security tools. Datadog’s security services are still in the early stages and offer significant benefits once properly commercialized.
Andrews added that DDOG “continues to fire on all sorts of cylinders,” noted Andrews that the existing market competition is largely harmless and the company should continue to benefit from its available market.
The financial aggregator TipRanks currently ranks Andrews 80th out of more than 7,000 analysts. Its success rate is 73%. Its ratings returned an average of 53.8%.
Snap (SNPO) serves as a point of contact for intelligent solutions for households and companies. Snap One recently posted a best seller in its third quarter report and is now focused on cementing its power in the “living smart” end market, “wrote Stephen Volkmann of Jefferies.
He said the company has a healthy amount of inventory on hand to offset ongoing supply-side headwinds and that its business model offers broad growth opportunities. Volkmann stated that Snap One is the “newest B2B distributor embarking on a successful investment model to consolidate a fragmented niche market with attractive growth momentum”.
The analyst rated the stock as a buy and stated a price target of $ 24 per share.
Snap One has benefited from inorganic growth through mergers and acquisitions. With its established sales and branch network, the company benefits from the considerable stream of home integration. Volkmann expects the market to grow by about 11% each year, and supply chain issues have been mitigated somewhat with Snap One’s price increases.
As for the supply-side challenges for the company, Volkmann expects them to dissolve in the course of 2022. This would prepare Snap One for higher margins and operational leverage in the long run.
TipRanks ranked Volkmann as No. 232 out of over 7,000 analysts. Its ratings were successful 74% of the time. They returned an average of 30.1% on each one.
Zynga (ZNGA) has successfully focused on attracting new users and developing new games in its pipeline. The social game developer recently posted its highest sales and bookings in the third quarter, in part due to an increasing ability to release new releases and scale its operations.
Wells Fargo’s Brian Fitzgerald, who wrote that the company was prioritizing the development of new content and game modes, identified significant benefits in the shabby rating. This strategy is expected to drive user acquisition and retention and bring the company back to its previous relevance in the mobile gaming space.
Fitzgerald listed the stock as a Buy and set a price target of $ 13.
The analyst said the troubled days of the past are now in the rearview mirror for Zygna as interest in its hyper-casual gaming segment has increased. Hyper-casual gaming, known for its minimalist and addicting gameplay, is one of the fastest growing genres in the industry.
The company managed its operating expenses efficiently. This, combined with ad growth, results in “better than expected operational leverage”.
TipRanks currently ranks Fitzgerald # 61 out of more than 7,000 other professional analysts. His stock picks were correct 72% of the time, and they returned an average of 57.1%.
Nio (NOK) recently released its third quarter pressures as mixed results. Although it beat sales estimates, the company’s guidance for the fourth quarter was more conservative than expected. The current roadblocks the automaker is facing are supply chain constraints and a company-wide manufacturing reorganization, although Mizuho Securities’ Vijay Rakesh believes these issues will only have a short-term impact.
In the long run, the future of the stock looks bright, according to Rakesh. The analyst added that the electric vehicle market in China is expanding to the point where the industry is nearing a “turn in adoption”.
Rakesh deemed the stock a buy with a target price of $ 67.
Beyond China’s borders, NIO recently expanded into Norway and cemented its arrival in its next target market. The launch in Europe marked a major milestone for the company, with the entry into the US next on its list.
Additionally, Rakesh was encouraged by Nio’s advances in battery technology that could result in lower production costs. The company has also introduced innovations in its assisted driver systems that it believes will act as a catalyst for growth.
Rakesh is rated # 30 by TipRanks out of over 7,000 financial analysts. His stock ratings were successful 79% of the time, averaging 53.7% per rating.
The last year and a half has been for cloud-based enterprise management companies like monday.com (MNDY). The software house benefited from the need for clear digital communication within companies, and the momentum has not yet subsided.
Bhavan Suri of William Blair & Company wrote that MNDY “has massively outperformed consensus estimates on all key metrics” and is now well equipped for another uptrend. He added that the company has “best-in-class” sales productivity and has seen encouraging adoption from more successful market players.
Suri rated the stock as a Buy but did not give a price target.
The analyst mentioned that monday.com’s revenues exceeded its heavy investments in sales and research and as a result, the company now has a breakable balance sheet. He expects the company to continue to gain market share over the long term as it continues to deliver strong business performance.
The recent volatility in the share price is most likely due in part to the uncertainty surrounding the company’s earnings calls and the expiration of a stock hold-up period. If the sharp price declines have nothing to do with his fundamentally solid business, this offers an attractive entry or purchase opportunity for long-term investors, according to Suri.
TipRanks ranks Suri 71st out of 7,000+ professional analysts. His stock pick was correct 73% of the time, and his ratings have an average return of 66.1%.