Friday’s rally gave investors a bit of a breather from the recent stock market turmoil, but it’s likely that more volatility is yet to come.
It doesn’t help that inflation is still lingering, and the Federal Reserve’s move to raise interest rates has added to the uncertainty.
Wall Street’s top pros are reminding investors to look past the turmoil and focus on long-term investing. According to TipRanks, which lists the top-performing Wall Street professionals, analysts are picking their favorite stocks to weather the storm.
Here are five stocks analysts are highlighting this week.
Coursera
Coursera (CURE) offers online courses covering a wide range of disciplines and skill levels, including undergraduate degrees. It is aimed at individuals and companies, including companies, who wish to upskill their workforce.
Coursera works with industry experts and universities to deliver the course content. Customers can purchase individual course certificates or a subscription. Coursera’s revenue grew 36% year over year to $120.4 million in the first quarter of 2022, beating the consensus estimate of $116.7 million. (See Coursera blogger sentiment on TipRanks)
Coursera couldn’t avoid the sell-off that has hit stocks across the board. However, those who buy the dip can get a great deal. Needham’s Ryan MacDonald attended Coursera’s recent annual conference and was convinced the stock represented a great long-term investment opportunity. In a recent report, the analyst pointed out that the discussions at the conference provided an outlook that implied growing opportunities across Coursera’s segments.
MacDonald categorized the stock as a buy with a price target of $32.
In the consumer segment, Coursera expands the professional certificate offering with high gross margin. This strategy will support revenue growth and margin expansion, the analyst said. According to MacDonald, Coursera is introducing innovative offers and free add-ons to the enterprise segment, designed to help it attract new customers while growing its share of the wallet.
Of the nearly 8,000 analysts in the TipRanks database, MacDonald is ranked 545. His success rate is 47%, with an average return of 12.5% per rating.
ZoomInfo Technologies
ZoomInfo (ZI) sells access to valuable database information that companies rely on for marketing and talent hiring. For example, the TalentOS platform enables companies to recruit more efficiently.
In the first quarter, ZoomInfo beat consensus estimates for revenue and earnings. The company continued to provide an upbeat outlook for the second quarter and the full year. (See ZoomInfo earnings data on TipRanks)
Despite the strong quarterly results and upbeat guidance, ZoomInfo’s stock has been caught in a downturn. According to Raymond James analyst Brian Peterson, ZoomInfo’s sell-off is a boon in disguise for long-term investors who can buy the stock cheaply. In a recent report, the analyst said ZoomInfo has more room for profitable growth, citing the company’s new product launches, acquisitions and international expansion efforts.
Peterson rated the stock a Buy with a price target of $65.
ZoomInfo is accelerating its international expansion in response to strong demand. The company is increasing its headcount in London and recently opened its first physical office in India.
At the same time, ZoomInfo continues with its strategic acquisitions. The company recently acquired Comparably and Dogpatch Advisors to strengthen its recruiting and sales solutions, respectively. As ZoomInfo expands overseas and improves its solutions through acquisitions, ZoomInfo wins more business from existing customers. For example, it recently had a deal extension with Google parent Alphabet (GOOGL), the analyst said.
Peterson is ranked 100th out of nearly 8,000 analysts in the TipRanks database. His stock ratings were correct 59% of the time, with an average return of 19.2% per rating.
Costco
Big box retailer Costco (COSTS) currently operates a network of around 830 stores and plans to open stores in 30 additional locations in 2022. The move could boost sales. (See Costco stock charts on TipRanks).
In its most recent quarterly report, Costco reported revenue and earnings that beat consensus estimates. However, Costco stock is still trading below where it started the year. Oppenheimer analyst Rupesh Parikh believes Costco remains a great investment and that the stock’s discount is a great opportunity to buy it at a lower price. In a recent report, the analyst highlighted Costco’s strong management team and track record of delivering shareholder returns.
Parikh has a Buy rating on the stock with a price target of $645.
In terms of shareholder returns, Costco has a long history of paying dividends. Recently, the annualized payout was increased to $3.60 per share. Parikh sees prospects for a special dividend. The analyst also noted Costco’s strong April sales despite the many headwinds retailers across the board are grappling with. The analyst also sees Costco in a strong competitive position that should allow it to gain more market share.
Parikh is ranked 352 out of approximately 8,000 analysts in the TipRanks database. The analyst was correct 62% of the time on his stock ratings, with an average return of 10.5% per rating.
Green Dot
Fintech company Green Dot (GDOT) provides prepaid debit cards, checking accounts, and cash processing services to consumers. It also helps with payroll payments and tax refund processing.
The company delivered strong first-quarter results as both sales and earnings improved from the year-ago quarter and beat consensus estimates. Der Grüne Punkt continued to issue an optimistic forecast for the second quarter and the year as a whole. The company has also launched a $100 million share buyback program. (See Green Dot Risk Analysis on TipRanks)
However, green dot stock remained under pressure amid the broader market sell-off. According to Needham analyst Mayank Tandon, GDOT has good prospects and the current pullback presents a golden opportunity.
Tandon has a Buy rating on GDOT with a target price of $35.
Noting that the pandemic has accelerated the adoption of digital banking and payments, the analyst added that the trend is feeding into core areas of GDOT. Tandon also noted that GDOT’s management continues to invest in driving future long-term growth. The investments, coupled with share buybacks, could result in double-digit earnings per share growth in 2023 and beyond.
Of the nearly 8,000 analysts in the TipRanks database, Tandon is ranked 573rd. The analyst’s views were correct 48% of the time, with an average return of 10% per review.
Zigna
Health Insurance Cigna (AI) is resisting the sell-off of the broader market. Investors continue to flock to Cigna stock after the company reported strong quarterly results and offered upbeat full-year guidance. Mizuho Securities analyst Ann Hynes believes this is the way to go now.
In a recent report, the analyst notes that Cigna’s prospects remain bright. The company recently launched a provider advisory service that it says will deliver better outcomes for cancer patients. The Service is operated by Evernorth Health Services. In a community pilot, Cigna’s results showed that 40% of patients benefited from updated therapy guidance thanks to the provider’s counseling service. According to Hynes, Evernorth’s business performed well in the first quarter and remains well-positioned for growth in 2023. (See Cigna Dividend Data on TipRanks)
Hynes rates the stock as a Buy with a price target of $291.
According to Hynes, Cigna’s Evernorth unit is benefiting from new business wins and strong renewal rates. The analyst also noted that there is a great cross-selling opportunity for Cigna between its healthcare segment and the Evernorth unit.
Of the nearly 8,000 analysts in the TipRanks database, Hynes is ranked 568. The analyst’s calls were correct 57% of the time, with an average return of 8.9% per review.