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The bottom is for these 3 actions? Analysts say ‘buy’
Never say that one person makes no difference. Last Thursday stocks fell, bonds surged, and investors started taking inflation risks seriously – all because a guy said what he was thinking. Jerome Powell, Chairman of the Federal Reserve, held a press conference in which he gave both good and bad. He stated, once again, his belief that the COVID vaccination program will allow a complete reopening of the economy and that we will see a resurgence of the labor market. This is the good news. The bad news is that we will probably also see consumer prices rise in the short term – inflation. And when inflation starts to rise, so do interest rates – and that’s when stocks typically fall. We’re not there yet, but the specter of it was enough last week to put serious pressure on the stock markets. However, as the market downturn has pushed many stocks very low, several Wall Street analysts believe the time may be right to buy. These analysts have identified three tickers whose current stock prices are landing near their 52-week lows. Noting that everyone is on the verge of resuming an upward trajectory, analysts see it as an attractive entry point. Not to mention that each achieved a moderate or strong buy consensus rating, according to the TipRanks database. Alteryx (AYX) We’ll start with Alteryx, a California-based analytics software company that takes advantage of the big changes brought by the Information Age. Data has become a commodity and an asset, and more than ever, businesses now need the ability to collect, collate, sort and analyze reams of raw information. This is exactly what Alteryx products do, and the company has built on that need. In the fourth quarter, the company reported net income of 32 cents per share on total revenue of $ 160.5 million, beating consensus estimates. The company also announced good news on the liquidity front, with $ 1 billion in cash on hand as of Dec.31, up 2.5% from the previous year. In the fourth quarter, cash flow from operations reached $ 58.5 million, beating the figure of $ 20.7 million a year earlier. However, investors were wary of lower-than-expected forecasts. The company was forecasting revenue of between $ 104 million and $ 107 million, compared to $ 119 million expected by analysts. The stock fell 16% after the report. This was amplified by the general market reversal at the same time. Overall, AYX is down about 46% in the past 52 months. Still, the recent sale could be an opportunity, as business remains strong in these tough times, according to 5-star analyst Daniel Ives of Wedbush. “We still believe the company is well positioned to capture market share in the nearly $ 50 billion analytics, business intelligence and data readiness market through its readiness platform and user-friendly end-to-end data analysis, once pandemic pressures have subsided. The revenue beat was due to a product mix geared towards initial revenue recognition, improved churn rates, and improved customer spend trends, ”Ives said. Ives’ comments support his outperformance (i.e. buy) rating and his price target of $ 150. implies a one-year increase of 89% for the share. (To look at Ives ‘track record, click here) Overall, the 13 recent analysts’ analysis on Alteryx, breaking down to 10 buys and 3 takes, gives the stock a Strong Buy Analyst Consensus Rating. The shares are selling for $ 79.25 and have an average price target of $ 150.45. (See AYX stock market analysis on TipRanks) Root, Inc. (ROOT) Moving on to the insurance industry, we’ll take a look at Root. This insurance company interacts with customers through its app, acting more like a tech company than a car insurance provider. But it works because the way customers interact with businesses is changing. Root also uses data analytics to set prices for customers, basing fees and premiums on m data on how a customer actually drives. It is a personalized version of auto insurance, adapted for the digital age. Root has also extended its model to the tenant insurance market. Root has been trading publicly for only 4 months; the company went public in October, and is currently down 50% since entering the markets. In its fourth quarter and full year 2020 results, Root posted strong direct bonus gains, although the company still reports a net loss. For the quarter, direct earnings bonuses increased 30% year over year to $ 155 million. For all of 2020, this metric gained 71% to reach $ 605 million. The net loss for the full year was $ 14.2 million. Truist’s 5-star analyst Youssef Squali covers Root, and he sees the company maneuvering to maintain a favorable outlook this year and next. “ROOT management continues to refine its growth strategy two quarters after the IPO, and 4Q20 results / 2021 outlook reflects such a process … tailwind as 2022 approaches. For us, this appears to be part of a deliberate strategy to shift the balance between revenue growth and profitability slightly more in favor of the latter, ”Squali noted. Squali’s rating on the stock is a buy, and its price target of $ 24 suggests a 95% rise in the coming months. (To see Squali’s track record, click here) Root shares are selling for $ 12.30 each, and the average target of $ 22 indicates a possible ~ 79% hike by the end of the year. There are 5 saved reviews with 3 to buy and 2 to keep, making analyst consensus a moderate buy. (See ROOT share analysis on TipRanks) Arco Platform, Ltd. (ARCE) The shift to online and remote working hasn’t just impacted the workplace. Schools and students around the world have also had to adapt. Arco Platform is a Brazilian educational company that provides content, technology, additional programs and specialized services to clients of schools in Brazil. The company has more than 5,400 schools on its customer list, with programs and products in classrooms from kindergarten to high school – and more than 405,000 students using learning tools from the Arco platform. Arco will release 4Q20 and full year 2020 results later this month – but a look at the company’s third quarter November release is instructive. The company described 2020 as “a testament to the resilience of our business.” By the numbers, Arco has announced big revenue increases in 2020 – no surprise, given the move to distance learning. Quarterly revenue of 208.7 million Brazilian reals ($ 36.66 million) increased 196% year-over-year, while the top line for the first 9 months of the year, at 705.2 million reals ($ 123.85 million), was up 117% year-on-year. The income of educational businesses may vary throughout the school year, depending on the school vacation schedule. The third quarter is typically the worst of the year for Arco, with a net loss – and 2020 was no exception. But Q3’s net loss was only 9 cents per share – a huge improvement over the 53-cent loss reported in 3Q19. Mr. Market has cut 38% from the company’s stock price in the past 12 months. However, one analyst believes that this drop in the share price could offer new investors the opportunity to enter ARCE on the cheap. Daniel Federle of Credit Suisse rates ARCE an outperformance (i.e. a buy) with a price target of $ 55. This figure implies a 12-month upside potential of around 67%. (To view Federle’s balance sheet, click here) Federle is confident the company is positioned for the next stage of its growth, noting: “[The] The company is structurally sound and moving in the right direction and … any possible weak operating data point is macro rather than any business related issue. We continue to believe that growth will return to its normal course once the effects of COVID wear off. Regarding expansion plans, Federle noted: “Arco has mentioned that it is in its plans to launch a product focused on the B2C market, probably already in 2021. The product will be focused on the offering of courses (eg test preparations) directly to students. It is important to note that this product will not be a substitute for learning systems, but rather a complement. The potential success achieved in the B2C market is an upside risk for our estimates. There are only two registered reviews for Arco, although both are buys, making analyst consensus here a moderate buy. The shares are trading for $ 33.73 and have an average price target of $ 51, which suggests a 51% rise from this level. (See ARCE stock analysis on TipRanks) To find great ideas for battered stocks at attractive valuations, visit the best stocks to buy from TipRanks, a newly launched tool that brings together all the information about stocks from TipRanks. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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