Every investor wants to see growth. No matter what your own idiosyncratic style, growth is the secret sauce that will turn every stock recipe into something special. Finding the stocks poised to grow is the trick, however, and it’s not easy.
There’s an old saw among investors, that past performance cannot guarantee future returns. That’s just a basic truth. But it’s natural to look back at what has happened to give some hints toward what will be.
Wall Street’s analysts are pros at this. They have the collective experience to interpret the market’s past trends, and the market savvy to make sense of current conditions – so when top-rated analysts start picking stocks for growth, we should listen to what they have to say.
We’ve used the TipRanks platform to pick out three stocks that meet a profile which should appeal to growth-oriented investors. These are Buy-rated stocks, and according to Wall Street’s 5-star analysts, each of these stocks has at least 80% upside potential for the year ahead. Here are the details.
Chicken Soup for the Soul Entertainment (CSSE)
Let’s start with a bit of self-help. Chicken Soup for the Soul started out as a book seller, publishing and marketing its popular series of eponymous self-help books. It has since evolved into a larger multi-media company; while it still publishes about a dozen books annually, CSSE has also acquired TV and video streaming outlets, and even markets a line of foods. This last includes soups and sauces, as well as pet foods.
A look at CSSE’s recent share performance shows ups and downs. The stock featured strong growth until mid-July – but it was slipping when the 2Q21 report showed EPS well below the estimates. Wall Street had expected a 55-cent EPS loss, but the real result was a much deeper loss of 79 cents per share. The stock fell 25% after the earnings release, and has yet to regain traction. At the same time, the stock is still up 34% for the year so far. It will be interesting to see if CSSE can regain its momentum when it releases its Q3 earnings report today after market close.
In addition, the company is making moves to expand its video content line-up. In the first week of November, CSSE first announced the formation of its new ‘Chicken Soup for the Soul Television Group,’ which will include the Landmark Studio Group, Locomotive Global, Chicken Soup for the Soul Studios, and Halcyon Studios. The television group will be complemented by a new, free, ad-supported video-on-demand (AVOD) streaming service. The new AVOD service will be available on Plex, FreeCast, and Redbox, among others.
All of this has caught the attention of Guggenheim analyst Michael Morris, who writes: “We believe CSSE is well positioned to connect content, advertisers and viewers through Crackle Plus, a portfolio of AVOD networks, and to expand its distribution touchpoints to capitalize on the secular growth of connected TV and ad-supported video-on-demand. The company’s integrated content and streaming network ownership structure underpins a virtuous cycle of investment and return, while a singular focus on streaming avoids the inherent economic and structural challenges facing traditional media competitors. At its current valuation, we see CSSE shares as an attractively priced pure-play AVOD streaming investment.”
To this end, Morris rates CSSE shares a Buy, along with a $37 price target, suggesting a one-year upside of 90%. (To watch Morris’s track record, click here)
While there are only 3 recent analyst reviews of CSSE they are all positive, making the Strong Buy consensus rating unanimous. The stock is selling for $19.48 and its average price target of $48 implies room for 146% growth from current trading levels. (See CSSE stock analysis on TipRanks)
AEye, Inc. (LIDR)
For the second stock, we’ll shift gears and take a look at a company staking out an important niche in the autonomous vehicle sector. AEye produces LiDAR systems – the radar ‘eyes’ of self-driving cars. The company’s products next-gen tech, based on intelligent AI with adaptive capabilities, even using military-grade automated targeting applications to scan the environment and locate the most important features. AEye’s iDAR (intelligent detection and ranging) system is the only AI software capable of integration with LiDAR.
AEye is taking steps to both improve its iDAR system, and to protect its intellectual property. In October, the company announced a partnership with a Korean firm, Seoul Robotics, to integrate AEye’s sensor and iDAR software platform with Seoul Robotics’ perception software – to improve the performance of both systems. In the intellectual property front, AEye announced in September that it had reached the milestone of 100 patents filed, in 10 countries across 4 continents. These filings will protect AEye’s investment in its sensor systems.
LIDR shares entered the NASDAQ index in August, after successful completion of a SPAC merger between AEye and CF Finance Acquisition Corporation III.
The automotive sector is investing heavily in autonomous vehicles, and that leaves room for AEye to grow. This makes a key point in the analysis by Roth Capital analyst Suji Desilva.
“LIDR is a next-generation sensing and perception lidar platform company that targets assisted driving/autonomous vehicles (ADAS/AV) and adjacent markets with the company’s proprietary iDAR (Intelligent Detection and Ranging) platform. We expect LIDR’s advanced iDAR platform to gain traction in higher-order L3/L4/L5 ADAS/AV auto models which emphasize more sophisticated highway driving safety. We believe a major advantage of LIDR’s business model is use of a high margin licensing/royalty-based revenue model with potential for gross margins of 80+% at scale,” Desilva explained.
In line with his optimistic approach, Desilva gives LIDR shares a Buy rating and his $15 price target suggests a robust 188% potential upside for the coming year. (To watch Desilva’s track record, click here)
While there are only 2 recent analyst reviews on this new stock, they are both positive and support the Moderate Buy consensus viewpoint. Shares in AEye are trading for $5.2, and the average price target of $14.50 implies an upside of ~179% in the next 12 months. (See LIDR stock analysis on TipRanks)
Sarcos Technology and Robotics (STRC)
Last but not least is Sarcos Technology, a robotics firm focused on the development of industrial technologies to combine human intelligence, judgement, and control with robotic strength, endurance, and precision. The goal – the next generation of industrial robots.
Sarcos’ products include a full-body exoskeleton capable of heavy-duty tasks, including lifting up to 90 kilos (200 pounds) repeatedly, without fatigue or strain; a smaller, dexterous mobile robot capable of operating in tight conditions, such as cherry-picker lift buckets, and conducting precision work in dangerous locations – while the human operator remains out of harm’s way yet close enough for remote control; and even a small mini robot, man portable yet able to move across difficult terrain, and offering video, void, and data communications in real time. Sarcos also has heavy-left defense department applications. The company has been a recipient of DARPA grants since the early 2000s.
This is another company new to the trading markets. On September 16 of this year, the company announced that its proposed SPAC merger with Rotor Acquisition Corporation was approved. The transaction closed on September 24, and the new STRC ticker debuted on the NASDAQ on September 27. Sarcos realized over $260 million in gross proceeds from the business combination.
Among the bulls is Jefferies analyst Stephen Volkmann, who rates STRC a Buy along with a $16 price target. This figure implies room for ~141% share appreciation in the coming year. (See Volkmann’s track record, click here)
Backing his stance, Volkmann wrote: “The company has estimated that the addressable market for their robotic solutions is roughly $147bn, which includes jobs identified under Bureau of Labor Statistics definitions that could benefit from Sarcos applications. Assuming a 10% penetration of these jobs would equate to roughly 16mn jobs for a total service obtainable market of ~$15bn. This is likely to be a conservative estimate as it is not inclusive of the roughly 4mn labor shortage that the Bureau of Labor Statistics has projected by the end of the decade. The company is currently projecting roughly $1.2bn in revenues for 2025 when they expect to have 22,500 units in service.”
STRC has stayed relatively under-the-radar, with its Moderate Buy consensus rating breaking down into 1 Buy and 1 Hold. At $6.65, the average price target indicates 88% upside potential. (See STRC stock analysis on TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
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.
Source: finance.yahoo.com