People wear protective masks outside the headquarters of Uber Technologies Inc. in San Francisco, California, U.S., Wednesday, June 9, 2021.
David Paul Morris | Bloomberg | Getty Images
The latest bout of market volatility has been nothing short of a stomach ache for short-term investors.
Indeed, a selloff led by tech and growth names spread into a malaise that left all three major averages firmly in negative territory for January.
Analysts make long-term projections of the companies they cover, allowing them to look beyond short-term stock fluctuations. Indeed, some of Wall Street’s top analysts have flagged their favorite names for long-term play, according to TipRanks, which tracks top-performing stock pickers.
E-commerce trends have cooled and stocks of some players in the space have suffered. Shopify (STORE) is not an outlier and has seen its valuation drop around 50% from its last high in November. For many analysts, the discounted stock price looks attractive on the traders’ POS platform. (See Shopify Stock Charts on TipRanks)
One such optimistic voice is Darren Aftahi of Roth Capital Partners, who predicts 30% year-over-year growth in gross merchandise value for SHOP’s upcoming earnings. Calling the company a leader in e-commerce, he noted the stabilization in consumer spending trends and the strong position Shopify has in its space.
Aftahi priced the stock long and provided a price target of $1,400.
More importantly, the analyst discussed Shopify’s recent strategic partnership with Chinese e-commerce giant JD.com. The deal will allow SHOP merchants to “sell directly to Chinese customers through JD Marketplace” and is expected to open them up to “a new TAM of approximately 500 million active JD customers in China.”
By reducing the market barrier to entry into the Chinese market from 12 months to 3-4 weeks, Aftahi is confident the deal will add to Shopify’s topline for the second half of 2022.
Financial aggregator TipRanks currently holds Aftahi ranked 222nd out of more than 7,000 analysts in its database. His pass rate is 39% and his grades earned him an average of 40.7% per.
For meta-platforms (Facebook), the final months of 2021 have been tumultuous: Countless amounts of negative headlines and information from whistleblower Frances Haugen and subsequent testimony before lawmakers about Meta’s algorithms have spooked some investors.
Brian White of Monness predicts a no less eventful year for Meta, which should publish its quarterly results on February 2. The tech conglomerate is also expected to “continue to benefit from the trend of digital advertising, participate in accelerated digital transformation and innovate.” in the metaverse.” (See Meta Platforms Website Traffic on TipRanks)
White priced the stock for buy and assigned a price target of $460.
The analyst noted that ad growth had slowed but was still maintaining a “respectable” spending pace. Plus, he doesn’t expect FB to be off the hook just yet when it comes to its continued negative publicity. Its upcoming earnings call will likely also include hot topics like Apple’s privacy policies, user engagement with Instagram Reels, and general e-commerce trends.
Despite these issues, White sees FB at an attractive updated valuation and remains broadly bullish on its earnings call.
Out of more than 7,000 analysts, White ranks 141st. His stock picks were correct 66% of the time and earned him an average of 31.1%.
The pandemic has surely caused a roller coaster of emotions for investors holding UberTechnologies (UBER), but analysts returned to their bullish expectations for the stock. At first, the omicron variant caused more panic and increased restrictions on mobility, although now it appears levels are returning to pre-pandemic numbers.
This situation was best described by Scott Devitt of Stifel, who argued that the global mobility recovery looks healthy and the company expects performance near the upper end of its guidance range. Uber is expected to report earnings on Feb. 9 after the market closes and will hold an investor conference the following day. (See Uber hedge fund activity on TipRanks)
Devitt gave the stock a buy rating and declared a price target of $50.
He went on to write that Uber recently revamped its loyalty program, after introducing its Uber One membership service. The new iteration of its old Uber Eats Pass will connect users to perks found across the company’s various businesses, including its delivery, grocery and ride-sharing apps. The move is expected to drive increased engagement within Uber’s loyal base and is seen by Devitt as “progressively positive as it strengthens the value proposition over the previous offering.”
Additionally, Uber has been busy integrating its freight capabilities with Transplace, a recently acquired logistics management software company.
Out of more than 7,000 financial analysts, Devitt is ranked No. 335. The analyst’s stock picks have been successful 52% of the time and have earned him an average of 23.9% per year.
Until the last quarter, the Covid-19 pandemic had been good for HubSpot (HUBS). As soon as news of the omicron variant hit the headlines, the stock started to drop precipitously. Still, analysts like the direction the marketing, sales, and business management software company is heading. (See HubSpot Insider Trading Activity on TipRanks)
Jefferies’ Samad Samana is one of those in the crowd, saying the stock “remains one of our favorite mid-cap stocks.” He noted that the end of 2021 and the first weeks of 2022 provide promising projections for the year.
Samana priced the stock long and issued a price target of $800 per share.
The analyst wrote about HubSpot’s continued and strong growth prospects in 2022, thanks in part to its “enterprise traction and higher connection rates.” The company has seen more and more large enterprises adopt its software and stick with it even after they have evolved themselves. In this sense, it is struggling with established players such as Salesforce.
Samana said that “some large customers who previously migrated from HUBS have expressed interest in returning to HUBS due to the significant advancements in the product suite and the ability to handle larger, more complex customers.”
TipRanks holds Samana at No. 386 out of over 7,000 analysts. His stock picks have returned correctly 53% of the time and have average returns of 29.9%.
The pandemic-induced digital transformation caught up with another cloud-based company and a workflow solutions company and sent its valuation skyrocketing. Like his peers, Service Now (NOW) also fell significantly from early November highs, but managed to post top-notch Q4 earnings. According to Brian Schwartz of Oppenheimer & Co., the title has a possible recovery in its cards.
The analyst noted strong momentum in ServiceNow’s business, fueled by demand for IT services. Regarding that demand, he was encouraged by NOW’s earnings, writing that “these results should allay concerns that enterprise IT demand is collapsing.” (See ServiceNow revenue data on TipRanks)
Schwartz priced the stock long and calculated a price target of $660.
Investors should always be on the lookout when companies set forecasts that exceed Wall Street consensus estimates. ServiceNow has done so despite continued headwinds from a slowing macro environment over the past two months.
Additionally, Schwartz noted his optimism despite the stock price swings, writing that “NOW offers a good balance of strong revenue growth, margin expansion, and high cash flow margins, so even if valuation multiples were to compress further across the space, its unique financial profile and rootedness in enterprise IT stacks positions ServiceNow to outperform its growing peers.”
He went on to say that ServiceNow “offers investors a unique proposition among large-cap software stocks.”
Out of more than 7,000 professional analysts in TipRanks’ database, Schwartz is ranked No. 14. He successfully rated stocks 72% of the time, and his picks earned him an average of 51.4%.