At a time when the future of companies is in a predicament, the million-dollar question is: which stocks do Wall Street analysts trust? We narrowed down five “Strong Buy” stocks using TipRanks’ Trending Stocks tool that tracks the most rated stocks during a specified period — Datadog (NASDAQ:DDOG), Guardant Health (NASDAQ:GH), Bill.com (NYSE:BILL), Epam Systems (NYSE:EPAM), and Papa John’s (NASDAQ:PZZA). These stocks are on analysts’ radars this week.
SaaS-based data monitoring and analytics platform Datadog has the backing of around 400 software platforms, including Amazon’s (NASDAQ:AMZN) Web Services and Microsoft’s (NASDAQ:MSFT) Azure, all of which provide native support for Datadog’s services. This pulls a lot of customers to its cloud-based platform. To that end, the company ended the third quarter with about 2,600 customers, up 44% year-over-year, bringing in more than $100,000 in ARR (annual run rate).
In 2021, the company’s adjusted earnings per share more than doubled, and analysts expect a 90% increase in earnings this year.
Importantly, Datadog is one of the few stocks that are on the path to hyper-growth, thanks to the long-term value of its unified cloud-based IT dashboards. This view justifies its relatively expensive stock price of about 61 times its 2023 earnings estimates.
What’s the Price Target for DDOG Stock?
Needham analyst Mike Cikos reiterated a Buy rating on Datadog with a price target of $90. Wall Street’s Strong Buy consensus rating is supported by 20 Buys and six Holds. The average DDOG price target of $110.74 implies 59.38% upside potential.
Guardant Health (GH)
Precision oncology services company Guardant Health is bridging a unique and relatively unmet need —tools to ensure accurate oncology testing. The company’s lab methodologies and tests aim to improve pathological tests that are key for cancer research.
Guardant’s services have garnered tremendous positive responses and gained popularity with oncologists. The continued focus on expanding its test offerings gives us a solid reason to trust its prospects. Several trials are underway to evaluate new tests, including the ECLIPSE trial to enhance the Shield blood screening test for colorectal cancer.
Shares are down around 53% year-to-date, partly because of deepening losses. However, sales growth is meaningful and consistent.
What’s the Price Target for GH Stock?
Citi analyst Patrick Donnelly cut his price target on Guardant Health stock to $80 from $100 but reaffirmed his Buy rating after the company’s Q3 results. In fact, 11 Wall Street analysts have retained their Buy ratings, and one has a Hold rating on the stock. The average GH price target of $80.77 indicates 71.1% upside potential from the current price.
Bill.com provides AI-enabled cloud-based financial operations software to small and mid-sized businesses. While revenues are on track to clock in $1 billion for the full year of Fiscal 2023, profitability remains a concern. Last quarter, its operating loss widened. Although its more than $2.6 billion cash & equivalents position on its balance sheet should not deter long-term investors, pessimism is rife among investors in the technology sector, especially unprofitable tech companies.
BMO Capital analyst Daniel Jester lowered his price target on BILL stock to reflect near-term macroeconomic challenges that are likely to impact transaction volume trends into the second half of Fiscal 2023 (consistent with the first half of Calendar Year 2023). Nonetheless, Jester remained bullish on Bill’s long-term prospects and reaffirmed his Buy rating on the stock.
What’s the Price Target for BILL Stock?
18 analysts on Wall Street have Buy ratings on BILL stock, while two have Hold ratings. The average BILL stock price target of $185.05 indicates 77.2% room for stock price appreciation over the next 12 months.
Epam Systems (EPAM)
Software engineering and IT consulting services provider Epam Systems is benefiting from rapid digital transformation. A continued focus on customer engagement and product development is also boosting the company’s growth.
It reported better-than-expected quarterly results last week, but several headwinds are awaiting EPAM in the fourth quarter, including the continued impact from the closure of its business in Russia, as well as foreign exchange headwinds.
These near-term concerns led a slew of analysts to lower their price targets. However, it is Epam’s long-term potential that analysts are betting on. Its acquisitions are expected to continue to be great revenue pullers. Moreover, the net cash on its balance sheet is another reason for experts to cheer for Epam.
What’s the Price Target for EPAM Stock?
Notably, nine analysts have a unanimous Buy rating on EPAM stock, with an average price target of $418.44, implying 32.4% upside potential.
Papa John’s (PZZA)
Inflation, supply-chain challenges, rising expenses, and high debt levels are among the concerns of the company, and the trends are likely to continue through the rest of 2022. So, why are analysts recommending PZZA stock? A strong brand name, innovative menu, technology, and international expansion are the answers.
Moreover, the chain has survived several market cycles and emerged stronger every time. Furthermore, Papa John’s solid cash-flow-generating capabilities ensure consistent cash returns to shareholders. The company hiked its quarterly dividend by 20% in August. The upcoming quarterly dividend of $0.42 per share will be paid out on November 25 to shareholders on record as of November 14.
What’s the Price Target for PZZA Stock?
On Wall Street, nine analysts gave Buy ratings, whereas three have Hold ratings on PZZA stock. The average PZZA price target of $98.64 implies that the stock has a 29.6% upside potential over the next year.
Macroeconomic challenges are hurting all of the above companies, but what earns them a Strong Buy on Wall Street are strong fundamentals and bright long-term outlooks.