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Is the fund for these 3 stocks? Analysts say ‘buy’
Never say that a person makes no difference. Last Thursday, stocks plunged, bonds soared and investors began to take inflationary risks seriously – all because one guy said what he thinks. Jerome Powell, president of the Federal Reserve, gave a press conference in which he gave both the good and the bad. He affirmed, once again, his belief that the vaccination program of COVID will allow a full reopening of the economy and that we will see a resurgence in the labor market. That’s the good news. The bad news is that we are likely to see consumer prices rising in the short term – inflation. And when inflation starts to rise, so do interest rates – and that’s where stocks typically fall. We are not there yet, but the specter of that was enough last week to put serious pressure on the stock markets. However, as the market’s retreat pushed many stocks to the bottom, several Wall Street analysts believe that now may be the time to buy. These analysts have identified three tickers whose current stock prices fall close to their 52-week low. Noting that each is set to resume an upward trajectory, analysts see an attractive entry point. Not to mention that each gained a moderate or strong purchase consensus rating, according to the TipRanks database. Alteryx (AYX) We will start with Alteryx, an analytical software company based in California that takes advantage of the great changes brought about by the information age. Data has become a commodity and an asset, and more than ever, companies now need the ability to collect, group, classify and analyze reams of raw information. This is exactly what Alteryx products allow, and the company has developed this need. In the fourth quarter, the company posted a net profit of 32 cents per share on $ 160.5 million in total revenue, exceeding consensus estimates. The company also reported good news on the liquidity front, with $ 1 billion in cash available on December 31, an increase of 2.5% over the previous year. In the fourth quarter, operating cash flow reached $ 58.5 million, crushing the previous year’s figure of $ 20.7 million. However, investors were concerned about the below-expected orientation. The company predicted revenue of $ 104 million to $ 107 million, compared with $ 119 million that analysts had expected. Shares plunged 16% after the report. This was amplified by the general opening of the market at the same time. Overall, AYX has dropped ~ 46% in the past 52 months. However, the recent liquidation may be an opportunity, as the business remains solid amid these challenging times, according to Wedbush 5-star analyst Daniel Ives. “We still believe that the company is well positioned to capture approximately $ 50 billion of market share in the analytics, business intelligence and data preparation market with its code-friendly end-to-end data preparation and analysis platform, a once pandemic pressures subside…. The drop in revenue was due to a product mix that leaned towards initial revenue recognition, an improvement in turnover rates and an improvement in customer spending trends, “said Ives. Ives’ comments support his Outperform rating (ie Buy) and its target price of $ 150 implies an 89% year-on-year upside for the stock. (To view Ives’ history, click here) Overall, the 13 recent analyst reviews on Alteryx, dividing into 10 purchases and 3 retentions, give the stock a strong buy consensus analyst. The shares are selling for $ 79.25 and have an average target price of $ 150.45. (See stock analysis AYX in TipRanks) Root, Inc. (ROOT) Moving to the insurance industry, we’ll see Root, this insurer interacts with customers through its app, acting more like a technology company than an auto insurer, but it works because the way customers interact with people in fangs is changing. Root also uses data analysis to define rates for clients, basing rates and premiums on measurable and measured metrics of how a client actually drives. It is a personalized version of car insurance, suited to the digital age. Root has also been expanding its model to the tenant insurance market. Root has been trading publicly for just 4 months; the company made the IPO in October, and is currently 50% down since it hit the markets. In its fourth quarter and 2020 results, Root showed solid gains in direct premiums, although the company still reports a net loss. For the quarter, direct earnings premiums increased 30% year-over-year, to $ 155 million. For the entire year 2020, this metric gained 71% to reach US $ 605 million. The net loss for the entire year was $ 14.2 million. Truist’s 5-star analyst, Youssef Squali, covers Root and he sees the company maneuvering to preserve a favorable outlook this year and next. “ROOT management continues to refine its growth strategy two quarters after the IPO, and the 4Q20 / 2021 outlook results reflect this process … They believe that their accelerated marketing investment should lead to an accelerated growth in the count of policies as the year progresses and provide tailwind towards 2022. To us, this seems part of a deliberate strategy to slightly shift the balance between frontline growth and profitability in favor of the latter, ”noted Squali. Squali’s rating for the stock is Buy, and its target price of $ 24 suggests an increase of 95% in the coming months. (To view Squali’s history, click here) Root’s shares are selling for $ 12.30 each, and the average target of $ 22 indicates a possible ~ 79% rise at the end of the year. There are 5 recorded reviews, including 3 to buy and 2 to retain, making the analyst consensus a moderate purchase. (See ROOT stock analysis at TipRanks) Arco Platform, Ltd. (ARCE) The move to online and remote work has not only affected the workplace. Around the world, schools and students have also had to adapt. Arco Platform is a Brazilian educational company that offers content, technology, complementary programs and specialized services for school customers in Brazil. The company has more than 5,400 schools on its customer list, with programs and products in classrooms from kindergarten through high school – and more than 405,000 students using the learning tools of the Arco Platform. Arco will present its 4Q20 and 2020 results later this month – but a look at the company’s third quarter November release is instructive. The company described 2020 as “proof of the resilience of our business”. By the numbers, Arco reported strong revenue gains in 2020 – no surprise, considering the shift to remote learning. Quarterly revenue of 208.7 million reais (US $ 36.66 million) increased 196% year on year, while net revenue in the first 9 months of the year, of 705.2 million reais (US $ 123.85 million ), grew 117% year-on-year. Earnings from educational companies may vary during the school year, depending on the school vacation schedule. The third quarter is usually 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 US cents per share – a big improvement over the 53 percent loss reported in 3Q19. Mr. Mercado has cut 38% of the company’s share price in the last 12 months. One analyst, however, believes that the lower share price may offer new investors an opportunity to join ARCE at a low cost. Daniel Federle of Credit Suisse rates ARCE as an Outperform (ie Buy), along with a target price of $ 55. This figure implies a potential 12-month high of ~ 67%. (To see Federle’s history, click here) Federle is confident that the company is positioned for the next stage of growth, noting: “[The] the company is structurally sound and is moving in the right direction and … any possible weakness in operational data is related to macro rather than any problem related to the company. We continue with the view that growth will return to its normal trajectory as soon as the COVID effects dissipate. ”Turning to expansion plans, Federle noted:“ Arco mentioned that it is in its plans to launch a product aimed at the B2C market, probably as early as 2021. The product will focus on offering courses (for example, preparations for exams) directly to students. It is important to note that this product will not replace learning systems, but a complement. The potential success achieved in the B2C market is a positive risk for our estimates. ”There are only two reviews recorded for Arco, although both are Purchases, making the analyst’s consensus here a Moderate Purchase. The shares are trading at $ 33.73 and have an average target price of $ 51, which suggests an increase of 51% from that level. (See ARCE’s stock analysis at TipRanks) To find good ideas for losing stock trades with compelling valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that brings together all TipRanks stock insights. Disclaimer: The opinions expressed in this article are exclusively those of the analysts presented. The content should be used for informational purposes only. It is very important to do your own analysis before making any investment.