Apple CEO Tim Cook poses in front of a new MacBook Airs running M2 chips display during Apple’s annual Worldwide Developers Conference in San Jose, California, June 6, 2022.
Peter Dasilva | Reuters
With the brutal 2022 behind us, we look ahead to a year of relatively predictable challenges. This calls for careful investing with a longer-term view. To help the process, here are five stocks chosen by Wall Street’s top analysts, according to TipRanks, a platform that ranks analysts based on their track record.
As its name suggests, DoubleVerify (DV) helps to improve the safety and security of online advertising. A pioneer in this area, the company’s services are employed by customers in the financial services, retail, automotive, travel, telecom, and pharmaceutical sectors. (See DoubleVerify Holdings Stock Chart on TipRanks)
Truist analyst Youssef Squali sees multiple growth opportunities, especially in the social media field. Interestingly, DoubleVerify’s social media client roster includes names such as TikTok, Microsoft (MSFT)-owned LinkedIn, Reddit, Amazon’s (AMZN) Twitch, Meta’s (META) Facebook and Instagram, and YouTube. Looking at this, Squali expects “social media as a channel has unlocked incremental spend for DV to attack within walled gardens, which advertisers value vs. letting these platforms ‘grade their own homework.'”
Moreover, the analyst pointed out that DoubleVerify’s sophisticated software solutions help client companies safeguard their brand reputation while maximizing their return on ad spend. This is particularly important as the digital advertising ecosystem is growing and so is competition. A safe, fraud-free, and appropriately targeted ad environment also helps companies draw traffic.
Squali is “incrementally bullish” on DoubleVerify, with a Buy rating and $36 price target. The analyst stands 92nd among more than 8,000 analysts tracked on TipRanks. Moreover, 57% of his ratings have been profitable, bringing 17.6% returns per rating on average.
Investors may be spooked by Apple’s (AAPL) weakening demand and production issues right now (as evident from the sharp decline in stock value). However, taking into account the value that the company has returned to shareholders in the past years, even through market downcycles, these headwinds seem to be mere hiccups in the company’s long-term journey.
Tigress Financial Partners analyst Ivan Feinseth agreed, adding that the “near-term production headwinds create a long-term buying opportunity, and its massive installed user base, increasing ecosystem, and growing Services revenue will continue to drive accelerating Business Performance trends, and greater shareholder value creation.”
Feinseth is particularly upbeat about the company’s foray into the metaverse with the launch of its mixed-reality headset this year.
Moreover, strong balance sheet and cash flow generating capabilities should enable Apple to continue to invest in growth-driving initiatives and enhance shareholder returns through share repurchases and dividend hikes. (See Apple Dividend Date & History on TipRanks)
The analyst reiterated a Buy rating on AAPL stock with a price target of $210. “AAPL is on our Research Focus List and in our Focus Opportunity Portfolio,” emphasized Feinseth, who holds the #269 position among more than 8,000 analysts on TipRanks.
The analyst’s ratings have been profitable 59% of the time and each rating has generated average returns of 10.5%.
Booking Holdings (BKNG) is an online platform for making travel and restaurant reservations, which, needless to say, has been benefiting lately from the easing of Covid-related travel restrictions. The stock joins Apple in Ivan Feinseth’s “Research Focus List” and “Focus Opportunity Portfolio.”
Continued travel demand has been transcending the current macroeconomic uncertainties, and that is a boon for Booking. Feinseth also points out that the reopening of China after a prolonged period of strict zero-Covid policy “creates a massive upside catalyst.” (See Booking Holdings Hedge Fund Trading Activity on TipRanks)
The company is also gaining increased penetration in the direct travel booking market thanks to its Genius loyalty program and its concept of travel integration. “BKNG’s ability to optimize its market reach and profitability through new technology, including machine learning and other forms of AI (Artificial Intelligence), enables it to expand its global reach, drive more competitive pricing, and increase profitability,” said the analyst.
Feinseth reiterated a Buy rating on Booking, with a price target of $3,210.
The challenging economic environment has led to too many problems for the public to be thinking about love. This has left investors swiping left on online dating service provider Bumble (BMBL), leading to a sharp drop in share prices.
Nonetheless, Stifel Nicolaus analyst Mark Kelley maintains a solid relationship with Bumble. “We view Bumble as one of the most innovative companies in the global online dating space offering a compelling and differentiated value proposition for consumers, which we believe will lead to a long runway of paying user/ARPPU growth, and a multi-year operating leverage story,” noted Kelley.
In the last quarter, Bumble launched its message-before-match feature, “Compliments,” which is expected to boost user engagement and thus, support monetization efforts. (See Bumble Blogger Opinions & Sentiment on TipRanks)
Additionally, the analyst believes that Bumble’s mission to prioritize user safety, accountability, and control helps the company stand out in the crowd of competing platforms. Importantly, Kelley also believes that Bumble may be heading into its best days as users increasingly open up to real-life dating after the COVID-19 pandemic disrupted the dating ecosystem since 2020.
Despite reducing the near-term price target to $27 from $30, Kelley maintains a Buy rating on Bumble.
The analyst’s track record shows that his conviction is worthy of consideration. Kelley has a 103rd ranking among more than 8,000 analysts. Moreover, 70% of his ratings have been successful, generating 31.5% average returns per rating.
Global technology player Perion Network (PERI) is another stock that Mark Kelley has vouched for recently. The analyst’s optimism was reflected in the reiteration of his buy rating and higher price target ($34 from $29). Its recent quarterly results showed positive trends, which led to the renewed conviction.
The analyst views Perion as a “unique ad tech offering,” boasting a portfolio of technology for helping advertisers and publishers scale their business. Perion’s growth journey has been a combination of organic expansion and expansion through acquisitions. Together, they have built a suite of assets that serve the “three pillars of digital advertising” — search, social media, and display/CTV. (See Perion Network Financial Statements on TipRanks)
Kelley expects the global digital advertising market to reach $650 billion by the end of this year. Within that, the analyst estimates the exact opportunity of Perion in terms of TAM (total addressable market) to be around $190 billion, keeping aside the $460 billion TAM estimate for Google search.