Investing

Top Wall Street analysts prefer these three stocks for the long haul

Investors’ worries around stubborn inflation and the timing of Federal Reserve rate cuts is resulting in rocky markets.

While macro challenges could affect near-term sentiment, investors with a long-term time horizon can use Wall Street analysts’ stock research to inform their investment decisions and enhance portfolio returns.

Here are three stocks favored by the Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.

Monday.com

Workplace management software maker Monday.com (MNDY) is this week’s first stock pick. The company impressed investors with upbeat first-quarter results, driven by strong demand for its products across all end markets.  

In reaction to the quarterly report, Goldman Sachs analyst Kash Rangan reiterated a buy rating on Monday.com stock and increased the price target to $300 from $270. Despite the post-earnings rally, the analyst still thinks that the stock is undervalued.

Rangan called Monday.com “a rare example of a company with visibility into improving NER [net expansion rate], growing momentum in the enterprise, SMB [small and medium businesses] strength, and healthy clip of FCF [free cash flow] margin.”

Rangan noted that the company is exhibiting solid pricing power within the small- and medium-sized business space, which reflects its high-value proposition.

Overall, the analyst expects the rate of revenue deceleration to moderate, with net new revenue growth likely starting to stabilize. He said he thinks Monday.com’s unified platform will support a durable margin profile and boost long-term revenue growth.

Rangan ranks No. 388 among more than 8,800 analysts tracked by TipRanks. His ratings have been successful 60% of the time, with each delivering an average return of 10.7%. (See Monday.com Hedge Fund Trading Activity on TipRanks)

Walmart

Next up is big-box retailer Walmart (WMT), which recently delivered better-than-anticipated revenue and earnings for the first quarter of fiscal 2025. The company’s results were fueled by robust e-commerce sales growth, supported by store-fulfilled pickup and delivery, as well as strength in the third-party marketplace.

In reaction to the print, Baird analyst Peter Benedict reaffirmed a buy rating on Walmart stock and increased the price target to $70 from $65. The analyst said he thinks the company’s focus on value and convenience continues to attract all customer cohorts, with the majority of the U.S. market share gains supported by higher-income households — that is, those with more than $100,000 in annual income.

The analyst’s increased price target reflects “WMT’s increasing momentum around reshaping its P&L through the scaling of higher margin/ROI [return on investment] accretive alternative revenue streams and automation initiatives.”

Benedict added that Walmart’s alternative revenue streams, including advertising, marketplace, fulfillment services, data monetization and Walmart+, carry higher margins and complement its core retail business.

The analyst estimates that these alternative streams generate about $7 billion in revenue. He expects profits from these growing businesses to be vital margin drivers that can help fund investments in Walmart’s other growth areas.

Benedict ranks No. 68 among more than 8,800 analysts tracked by TipRanks. His ratings have been profitable 69% of the time, with each delivering an average return of 15.1%. (See Walmart Technical Analysis on TipRanks)

CyberArk Software

Finally, let’s look at the cybersecurity company CyberArk (CYBR). On May 20, the company announced an agreement to acquire machine identity management provider Venafi for $1.54 billion from private equity firm Thoma Bravo.

CyberArk expects the deal to be closed in the second half of this year. The company anticipates that Venafi’s complementary machine identity security solutions will expand its total addressable market by about $10 billion to nearly $60 billion.

TD Cowen analyst Shaul Eyal reiterated a buy rating on CyberArk stock with a price target of $300 after the deal’s announcement. The analyst noted that the company’s previous acquisitions, including Idaptive, Conjur and Viewfinity, were quickly and effectively integrated and have delivered significant returns in recent years.

While Venafi represents CyberArk’s largest acquisition to date, Eyal said he thinks the company’s management team will maintain its strong M&A track record.

Eyal highlighted that the deal is expected to be immediately accretive to CyberArk’s gross, operating and cash flow margins. He added that the company is well-positioned to leverage huge revenue synergy opportunities through cross-sell, up-sell and geographic expansion. The company plans to capitalize on its extensive, global go-to-market network to distribute Venafi’s solutions.

“CYBR’s existing 8.8K customers represent early upsell/cross-sell opportunities (there is a ~200 customer overlap),” said Eyal.  

Eyal holds the 15th position among more than 8,800 analysts tracked by TipRanks. His ratings have been successful 68% of the time, with each delivering an average return of 26.7%. (See CyberArk’s Ownership Structure on TipRanks)

Source link

Share with your friends!

Leave a Reply

Your email address will not be published. Required fields are marked *

Sign up now for breaking stock alerts

Subscribe to our mailing list and get interesting stuff and updates to your email inbox.

Thank you for subscribing.

Something went wrong.