Top analysts see a buying opportunity for Roblox and Boeing
A Boeing 777X aircraft takes off on its first test flight from the company’s factory in Everett, Washington on January 25, 2020.
Terray Sylvester | Reuters
February started on a dramatic note as major tech companies including Meta Platforms and Amazon released quarterly results and swayed leading averages.
While the short-term turbulence is enough to rattle most investors, it takes a long-term perspective to look at the dramatic swings in stock prices. To that end, top analysts highlight companies they believe have long-term potential, according to TipRanks, which tracks top-performing stock pickers.
Here are five stocks Wall Street analysts find compelling.
The tumult in tech stocks isn’t the only thing giving investors indigestion. Bitcoin and other cryptocurrencies have seen sharp moves – and stocks of companies that mine the flagship crypto have also suffered.
A company is starting to look like a worthwhile buy, according to Jonathan Petersen of Jefferies: Marathon Digital Holdings (MARA). Marathon’s close ties to the spot price of bitcoin have subjected its shares to volatility. However, instead of backing down, the company has invested in even more mining infrastructure and is currently on track to control the largest market share in its industry. (See Marathon’s Digital Insider Trading Activity on TipRanks)
Petersen expects that milestone to come to fruition this year. It calculates that Marathon Digital holds around 1.9% of the total mining market, and it expects that number to exceed 5% once its new hardware is rolled out.
After calculating MARA’s growth potential, the analyst considers “miners a better investment than BTC”.
Petersen rated the stock as a buy and assigned a price target of $51.
The analyst noted that MARA made more deposits for its miners than any of its competitors. Additionally, the company uses third-party data centers to speed up its deployment processes. Petersen wrote that “MARA’s future growth strategy of using data center hosting providers sets the company apart from some of its larger peers”.
This method helps reduce operating costs in the short term, but it can be a problem years later when margins shrink after bitcoin’s halving in 2024. bitcoin halving event halves the reward for mining cryptocurrency and reduces the circulation rate of new bitcoins. This happens approximately every four years.
Out of more than 7,000 analysts, Petersen is ranked No. 290. His hit rate stands at an impressive 72% and has returned an average of 20.8% on his stock picks.
Another name that has fallen significantly from its November highs is Roblox (RBLX), which has been dragged down by the slump in technology and growth over the past two months. The stock largely benefited from Meta Platform (Facebook) are pivoting to the metaverse, and it looks like its stock price was no longer viable.
Despite the rotation, the video game developer is still expected to play an important role in budding opportunities in the metaverse. The stock has fallen more than 50% since its peak in mid-November. (See Roblox Stock Charts on TipRanks)
Stifel’s Drew Crum noted that Roblox has “demonstrated yearly and sequential gains”. He said the company ranked third in the world against other popular gaming platforms in December 2021.
Crum priced the stock as a buy and listed a price target of $110.
The analyst was encouraged by RBLX’s progress in terms of its relevance among its peers on iOS and Xbox systems, as well as its robust organic growth in reservations revenue.
Crum believes that “Roblox represents a compelling game about the convergence of content and social, two ‘viral loops’ that provide a mutually reinforcing network effect, and together should drive high engagement, and therefore monetization on its platform. .”
On TipRanks, Crum maintains a ranking of #121 out of over 7,000 financial analysts. When picking stocks, he was correct 69% of the time and returned an average of 39.3% on his ratings.
Boeing (BA) has been plagued by its 737 Max saga, a story that has seen its new plane grounded across the globe. However, many countries have since recertified it, and Boeing has started to see new orders coming in for other planes.
Ken Herbert of RBC Capital Markets noted that more recently Qatar Airways placed an order for 34 new 777X freighters, with an option for 16 more. (See Boeing risk factors on TipRanks)
Herbert priced the stock as a buy and calculated a price target of $265 per share.
Regarding a possible industry-wide rebound, the analyst noted that he expects “continued strength in order activity to support a positive view of aerospace fundamentals.” Additionally, as consumer spending trends continue to drive e-commerce activity and shipping costs remain high, airlines are shifting their focus to cargo operations.
The strategy comes as leisure and business travel have suffered lingering impacts and airlines have been sent to seek to make up for losses. Additionally, the new fuel-efficient 777X freighters are particularly attractive at a time when oil commodity prices remain at dizzying levels.
TipRanks ranks Herbert at #214 out of over 7,000 professional analysts. He successfully picked stocks 64% of the time and averaged a 27.3% return on each one.
chip maker Advanced micro-systems (AMD) just beat Wall Street consensus estimates on its earnings report and provided “dramatic guidance for March”, according to Susquehanna’s Christopher Rolland. (See Advanced Micro Devices Revenue Data on TipRanks)
The analyst rated the stock as a buy and raised its price target from $175 to $180.
Explaining that AMD is strong in all of its businesses, Rolland remained optimistic about the company’s prospects. It noted that robust shipments were seen in its DC GPU segment, and its Enterprise, Embedded, and Semi-Custom (EESC) segment saw its profitability soar. The latter outperformed hugely, with fourth-quarter earnings nearly doubling what was generated in 2020.
Rolland added that the acquisition of Xilinx, a programmable logic semiconductor company, is expected to be completed within the next two weeks. AMD is also ramping up production of its Milan-X processor, with its Genoa and Bergamo chips expected to help its product cycle by the second half.
Rolland concluded by mentioning that AMD has repurchased approximately $1 billion in stock and that “we recommend investors do the same.”
Out of more than 7,000 expert analysts, TipRanks keeps Rolland at No. 4. His stock ratings have become correct 86% of the time and have average returns of 53.4%.
Block of (SQ) valuation skyrocketed as consumers shifted to using contactless and app-based payment systems. However, with a deceleration in trends over the past quarter coupled with a sell-off in tech and growth, SQ shares are down around 62% from their peak last August.
The “super-app” fintech company recently completed its acquisition of the “buy now, pay later” company Afterpay, and JPMorgan’s Tien-Tsin Huang is optimistic about the possibilities. He is confident that the business integration will be used to monetize and increase gross profits, and that it fits perfectly between the Block and Cash App vendor ecosystems.
Huang priced the stock as a buy and assigned a price target of $200.
The analyst said the stock is currently trading at an attractive price compared to its super app peers, especially given its “large and untapped addressable market, unique growth characteristics and mission and an equally unique company culture”, all of which justify his assessment. (See Block website traffic on TipRanks)
Huang is optimistic about Afterpay’s capabilities, saying allowing sellers to offer installment payments to their customers is “just the beginning”. He expects the two-way network to accelerate Cash App engagement, Cash Card user acquisition, and Block’s international presence as a whole.
Huang is ranked No. 238 out of more than 7,000 financial analysts in the TipRanks database. Of his stock picks, 66% of them were successful and they earned him an average of 31.8% per year.