The third quarter earnings season saw many breathtaking beats – and some notable disappointments. Investors are now faced with a frightening question: Which companies will carry their success into the following quarters?
Tesla, for example, led the green tide of electric vehicles and has yet to recapture its rise to prominence. Video games also saw a massive rebound during the pandemic, but can developers like Take-Two Interactive continue to generate revenue? As another example, sport is back, but FuboTV is now turning to sports betting to accelerate its business. In addition, the shift in society towards cloud services has created significant demand for cloud infrastructure and services companies like Calix, but will the company keep its relevance? After all, the highly competitive semiconductor development industry is a highly competitive race, but it appears Advanced Micro Devices is poised for some well-designed quarters.
Some of Wall Street’s top performing analysts recently released their bullish hypotheses on these five names, according to TipRanks, which tracks top performing stock picks. Let’s see what they have to say.
Tesla
The green tidal wave continues to crash over investors as Tesla (TSLA(HTZZ) for 100,000 vehicles. The deal is sure to bring Tesla a steady stream of revenue through the end of 2022, but the deal also marks the transition to greater adoption of electric vehicles in the U.S. (see Tesla Hedge Fund Trading Activity on TipRanks).
In his report, Daniel Ives of Wedbush Securities stated that Tesla is “taking the lead” with several competing companies including General Motors and Ford in the search for more electrical innovations in the domestic electric vehicle industry.
Ives reiterated its buy recommendation and price target of $ 1,100 for the stock.
The five-star analyst noted that while demand had previously reached high levels in China and Europe, Tesla is now several months behind in US sales of several models. Ives expects the supply to increase immediately after the gigafactories in Austin and Berlin go into operation, which could enable the company to produce 2 million vehicles per year.
Additionally, global chip scarcity has constrained Tesla’s supply chain, which has contributed to increased vehicle waiting times.
Ives wrote that the Hertz contract was the “biggest electric deal of all time” and “speaks to where the demand is going in the EV transformation that is hitting the automotive sector worldwide”.
Out of more than 7,000 analysts on its website, TipRanks ranked Ives 20th. His strong performance led to success 78% of the time, returning him an average of 37.8% per trade.
Take-Two Interactive Software
The past year and a half have been good for video game developers. Sales boomed and valuations soared, aided by government-enacted lockdowns. One of these developers, Take-Two Interactive Software (TWO) has shifted from his previous focus on video game development to heavy investments in sales and marketing. The company now has a robust pipeline in the works and has a strong ability to surprise investors.
Jefferies’ Andrew Uerkwitz put forward his hypothesis about the company and wrote that he anticipates TTWO will release up to nine major game titles outside of sports over the next three years, a significant increase from the previous one or two titles per year would mean. If the company can operate at this level, it would accelerate growth and fill a void left by GTA VI (Grand Theft Auto 6, the latest installment of a popular video game) that is unlikely to be released before 2026. (See Take -Two News Sentiment on TipRanks)
Uerkwitz listed the stock as a Buy with a target price of $ 231 per share.
Take-Two, which according to the analyst “has some of the highest quality content among US publishers,” is trading at a “fair” rating. While it’s impossible to predict exactly how its new game titles might succeed, Uerkwitz argues that the sheer number of games released will alone be enough to generate short-term to medium-term profits.
Uerkwitz recommends buying the stock straight away and points out that a higher target price is expected to be published as soon as the pipeline has a clear perspective.
The financial data aggregator TipRanks has rated Uerkwitz as No. 111 by over 7,000 analysts. Its success rate is 65% and its reviews have an average return of 27.9% each.
FuboTV
The streaming wars rage on and FuboTV (FUBO) is making strides to expand beyond television entertainment. The live sports and streaming service has largely focused on its tables of contents but is now awaiting approval to start a sports betting business.
The company has also sponsored deals with connected TV OEMs in an attempt to gain more subscriptions. This had the positive side effect of lowering marketing costs. (See FuboTV website traffic on TipRanks)
Darren Aftahi of Roth Capital Partners predicts an upside potential for the stock, gives it a buy and assigns it a price target of 45 US dollars.
Aftahi stated that the sooner Fubo sports betting hits the market the better, as the fourth quarter typically includes seasonally increased advertising spend for holidays. There are hints of the launch, with FUBO announcing partnerships with NASCAR as well as teams within the NBA and NFL. A potential sports betting and gaming segment has not yet been incorporated into Aftahi’s valuation forecasts and would only serve as a bonus.
Once launched, it will be imperative for Fubo to demonstrate that it can win audiences in an “immensely competitive online gaming market”. If possible, the phrase “could act as a positive catalyst for incremental growth” driving subscriber numbers throughout FY2022.
In anticipation of FuboTV’s upcoming earnings release, Aftahi noted that average earnings per user could be impacted as most of this quarter’s subscribers didn’t add until late in the reporting period. This is partly due to the timing of the football season, although he doesn’t think it will hurt Fubo’s average advertising revenue per user, which is set to improve quarter by quarter.
Aftahi is rated # 78 on TipRanks by more than 7,000 financial analysts. His ratings were correct 53% of the time, and his stock picks achieved an average return of 49.2%.
Calix
From the beginning of the Covid-19 pandemic until today, cloud services have gone from being an innovation to being a staple. Companies like Calix (CALX), whose rating was almost doubled in the past year, remains relevant for its telecommunications customers due to the emphasized “criticality of broadband services”, according to George Notter of Jefferies.
Undeterred by Calix’s impressive performance over the year, Notter remained bullish on the stock and rated it a Buy. He also cited a price target of $ 74.
Notter said Calix Cloud, which offers a suite of data analysis tools for marketing, customer support and networking, has room for growth. Long-term gains are forecast by Notter, and current penetration only marks the beginning of this process. (See Calix Risk Factors on TipRanks)
The company recently reported encouraging results for the third quarter despite supply-side restrictions curling its sales. These challenges also mitigated the upward trend resulting from the expanded offerings in Calix Cloud. However, Notter noted that the company manages its component supply relatively well and is currently weathering the storm.
In his report, Notter wrote that the company’s CFO mentioned that Calix “will enter the fourth quarter of 2021 with robust bookings in the strongest financial position in our history. [and] clear customer and product focus. “These statements were accompanied by statements on high sales and the expansion of international business.
Notter holds the 469 position out of more than 7,000 professional financial analysts. He was successful 67% of the time, averaging 17.1% of his stock picks.
modern micro devices
While other industries have stalled in the face of global semiconductor shortages, Advanced Micro Devices (AMD) basks in the sustained high demand. The computer processor designer recently reported impressive earnings that exceeded Wall Street’s consensus estimates of sales, earnings per share and gross margins. Beyond the third quarter, analysts look to AMD’s bright future. (See AMD stock analysis on TipRanks)
One of these analysts, Hans Mosesmann from Rosenblatt Securities, wrote that AMD’s “David vs. Goliath” story was being taken seriously by investors. He added that the company will leverage the existing semiconductor industry and its competitor, namely Intel (INTC) fight an uphill battle.
Mosesmann cemented his bullish stance on the stock by rating it “Buy” and raising his price target from $ 150 to $ 180.
The analyst stated that AMD is experiencing high momentum in all of its products. Meanwhile, the business is seeing “stronger-than-expected demand, stock gains and better-than-expected implementation of supply-related restrictions.” Mosesmann called the stock a “top three buy tip” and expressed his long-term trust in AMD.
In addition, he expects years of growth for AMD’s market share in data centers, communications infrastructure, and industrial and automotive applications.
Out of over 7,000 analysts, Mosesmann ranks 38th on TipRanks. The website calculated its success rate to be 73% and its average return per review to be 31%.
