The bottom is in for these 3 stocks? Analysts say “buy”
Never say that one person makes no difference. Last Thursday, stocks fell, bonds rose, and investors took inflation risks seriously – all because someone said what they thought. Federal Reserve Chairman Jerome Powell held a press conference giving both good and bad. He reiterated his belief that the COVID vaccination program will allow the economy to reopen completely and that the labor market will revive. That’s the good news. The bad news is that consumer prices are likely to rise in the short term too – inflation. And when inflation starts to rise, interest rates rise too – and then stocks usually slide. We’re not there yet, but the ghost last week was enough to put serious pressure on the stock markets. However, as the market decline has driven many stocks to lows, several Wall Street analysts believe now is the time to buy in. These analysts have identified three tickers with current stock prices landing near their 52-week lows. The analysts note that everyone will return on an uptrend and see an attractive entry point. Not to mention that everyone has bought a consensus rating of moderate or strong according to the TipRanks database. Alteryx (AYX) We’re starting Alteryx, a California-based analytics software company that leverages the big changes in the information age. Data has become a commodity and an asset, and businesses now more than ever need the ability to gather, collect, sort, and analyze myriad raw data. Alteryx’s products do just that, and the company has built on that need. In the fourth quarter, the company reported net earnings of 32 cents per share on total revenues of $ 160.5 million, beating consensus estimates. The company also reported good news in terms of liquidity, with $ 1 billion in cash available as of December 31, up 2.5% year over year. In the fourth quarter, operating cash flow was $ 58.5 million, down from $ 20.7 million a year ago. However, investors were concerned about the unexpectedly low outlook. The company forecast sales between $ 104 million and $ 107 million, compared to $ 119 million analysts had expected. The stock fell 16% according to the report. This was compounded by the general market slowdown at the same time. Overall, AYX is down ~ 46% over the past 52 months. However, the recent sell-off could be an opportunity as business remains solid during these challenging times, according to Wedbush 5-star analyst Daniel Ives. “We still believe that the company is well positioned to win nearly $ 50 billion worth of market share in the analytics, business intelligence and data preparation market with its end-to-end code-friendly data preparation and analysis platform as soon as the pandemic pressure subsides. The decline in sales was due to a mix of products tending to recognize upfront revenue, improve churn rates, and improve customer spending trends, “said Ives. Ives’ comments underpinned his outperform rating (i.e. buy) and price target of $ 150, up 89% for the stock for a year. (To see Ives’ track record, click here) In total, the 13 most recent analyst reviews on Alteryx, divided into 10 buys and 3 holds, give the stock one Strong Buying Analysts Consensus Rating. Stocks sell for $ 79.25 with an average price target of $ 150.45. (See AYX stock analysis on TipRanks.) Root, Inc. (ROOT) As we move into the insurance sector, we’ll be looking at Root This insurance company interacts with customers through its app who act more like a tech company than a car insurer th. But it works because the way customers interact with companies is changing. Root also uses data analytics to set tariffs for customers, where fees and premiums are based on measurable and measured metrics about how a customer actually drives. It is a personalized version of auto insurance that is suitable for the digital age. Root has also extended its model to the rental insurance market. Root has been publicly trading for only 4 months; The company went public back in October and is currently down 50% since it hit the market. In its fourth quarter and full year 2020 results, Root posted solid gains in direct premiums, although the company is still posting a net loss. For the quarter, direct earnings awards increased 30% year over year to $ 155 million. For 2020 as a whole, that metric increased 71% to $ 605 million. The net loss for the full year was $ 14.2 million. Truist’s 5-star analyst Youssef Squali reports on Root, and he sees the company looking to get a favorable outlook this year and next. “ROTS Management continues to refine its growth strategy two quarters after the IPO, and the outlook for Q4 20/2021 reflects such a process. They believe that their increased marketing investments during the year will accelerate the growth in the number of policies and should provide a significant tailwind towards 2022. To us, this seems part of a deliberate strategy to balance revenue growth and profitability shifting slightly more in favor of the latter, ”noted Squali. Squali’s valuation of the stock is a buy, and its target price of $ 24 points to a 95% uptrend over the coming months. (To see Squali’s track record, click here.) Root’s shares sell for $ 12.30 each, and the average target of $ 22 indicates a possible uptrend of ~ 79% by year-end. There are 5 ratings registered, including 3 to buy and 2 to hold, making the analyst consensus a moderate buy. (See ROOT stock analysis on TipRanks.) Arco Platform, Ltd. (ARCE) The move to online and remote working has not only affected the workplace. Schools and students around the world have also had to adapt. Arco Platform is a Brazilian education company providing content, technology, add-on programs and specialized services to school customers in Brazil. The company has more than 5,400 schools on its list of customers with programs and products in classrooms from kindergarten to high school – and over 405,000 students using Arco Platform learning tools. Arco will release fourth quarter and full year 2020 results later this month. However, a look at the release of the third quarter in November is instructive. The company called 2020 “proof of the resilience of our business”. In terms of numbers, Arco saw strong sales growth in 2020 – no surprise given the move to distance learning. Quarterly sales of 208.7 million Brazilian reals ($ 36.66 million) increased 196% year over year, while sales for the first nine months of the year were 705.2 million real (123.85 million US dollars) ) increased by 117% compared to the previous year. Income for education companies may vary over the course of the school year depending on the school holiday schedule. The third quarter is typically the worst of the year for Arco, with a net loss – and 2020 was no exception. However, the net loss for the third quarter was only 9 cents per share – a huge improvement over the 53 cents loss reported in the third quarter of 19. Mr. Market has cut 38% of the company’s share price over the past 12 months. However, one analyst believes that this lower share price could offer new investors an opportunity to get into ARCE cheaply. Credit Suisse’s Daniel Federle rates ARCE as an outperform (ie buy) along with a price target of USD 55. This number implies a 12 month upside potential of ~ 67%. (To see Federle’s track record, click here.) Confident that the company is positioned for the next phase of growth, Federle notes: “[The] The company is structurally sound and moving in the right direction. … Any weak operational data point is macro-related rather than a business-related problem. We continue to assume that growth will return to normal once the COVID effects go away. Regarding expansion plans, Federle noted, “Arco mentioned that it is within its plans to bring a product to the B2C market, probably as early as 2021. The product will focus on providing courses (e.g. test prep ) directly to students. It is important to note that this product is not a replacement for learning systems, but an addition. The potential success in the B2C market is an upside risk to our estimates. “There are only two reviews for Arco, although both are purchases, making the analyst consensus here a moderate buy. The shares trade for $ 33.73 and have an average price target of $ 51, indicating an upward movement of 51% from that level. (See ARCE stock analysis on TipRanks.) To find great ideas for trading rundown stocks at attractive valuations, visit TipRanks’ Best Stocks to Buy, ‘a newly launched tool that brings together all of TipRanks’ stock insights. Disclaimer: The opinions expressed in this article are solely those of the presented analysts. The content is intended to be used for informational purposes only. It is very important that you do your own analysis before making any investment.