The July consumer price index reading indicated cooling inflation and July retail sales addressed investors’ fears about an economic slowdown. They also boosted hopes of an interest rate cut at the Federal Reserve’s upcoming meeting in September.
Amid improving market sentiment, investors looking for some good stocks can rely on top Wall Street analysts, who can suggest stocks with attractive long-term growth potential. Top analysts make recommendations after conducting an in-depth analysis of a company’s financials, competitive backdrop and future prospects.
With that in mind, here are three stocks favored by the Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.
Monday.com
This week’s first pick is project management software provider Monday.com (MNDY). The company impressed investors with its second-quarter results and raised full-year outlook, thanks to strong demand from large customers. Notably, the number of paid customers with more than $100,000 in annual recurring revenue (ARR) increased by 49% to 1,009.
In reaction to the robust results, TD Cowen analyst Derrick Wood boosted his firm’s price target for MNDY to $300 from $275 and reiterated a buy rating, calling the stock a top pick. The analyst highlighted solid demand for Monday.com’s products among high-paying customers, with the company winning its largest deal ever with a multinational healthcare company.
“We see this as a proof-point that MNDY is successfully moving up-market and becoming more of a platform sale, and we think this is an early sign of more large deals to come,” Wood said of the deal.
The analyst also noted that Monday.com expects its net dollar retention (NDR) rate to remain stable at about 110% through fiscal 2024, with management projecting a modest upside by the end of the year.
“We see upmarket traction, new product adoption, and pricing tailwinds as strong growth vectors for continued execution into 2H,” said Wood.
Wood ranks No. 197 among more than 8,900 analysts tracked by TipRanks. His ratings have been successful 60% of the time, with each delivering an average return of 13.3%. (See MNDY Hedge Fund Trading Activity on TipRanks)
CyberArk Software
Another favorite tech company is CyberArk Software (CYBR). The identity security company posted upbeat second-quarter results and raised its full-year outlook, citing durable demand for its platform.
Following the Q2 print, Baird analyst Shrenik Kothari reaffirmed a buy rating on CYBR stock and raised his price target to $315 from $295. The analyst believes that the strong NNARR (net new annual recurring revenue) in Q2, solid new business acquisitions and the expansion of business among existing customers were driven by CYBR’s unified identity security platform.
Kothari noted that CYBR’s workforce identity and machine identity solutions are emerging as major growth catalysts. He believes that the stock’s premium valuation compared to peers is justified, given “the shift to recurring revenues and CYBR’s position as a market leader.”
Despite macroeconomic challenges, the analyst is optimistic about the demand for CyberArk’s identity security solutions due to an evolving threat landscape. He added that the company’s robust profitability and free cash flow indicate its ability to leverage clients’ identity security needs.
The analyst highlighted that management is positive about the pending acquisition of Vanafi, which is expected to enhance CyberArk’s position in the machine identity security market.
Kothari ranks No. 196 among more than 8,900 analysts tracked by TipRanks. His ratings have been profitable 72% of the time, with each delivering an average return of 22.7%. (See CYBR Stock Charts on TipRanks)
T-Mobile US, Inc.
Finally, the week’s third stock pick is wireless network provider T-Mobile US (TMUS). The company recently reported better-than-expected second-quarter results and raised its full-year guidance for postpaid net customer additions and cash flows.
On August 12, Tigress Financial Partners analyst Ivan Feinseth reiterated a buy rating on TMUS stock and increased his price target 15% to $235 from $205. T-Mobile US continues to outperform the industry in terms of customer additions and services revenue growth, backed by “the industry’s best ultra capacity 5G high-speed network,” Feinseth said.
T-Mobile’s high-speed network and extensive 5G availability are boosting subscriber growth and driving higher revenue and cash flow, the analyst added. Highlighting TMUS’ vast footprint, Feinseth said that the company’s 5G network reaches 98% of Americans, while its ultra capacity 5G network covers over 330 million people. He expects the company to benefit from opportunities in fixed wireless access (FWA).
Additionally, Feinseth is encouraged by T-Mobile’s shareholder returns. In Q2 2024, TMUS returned $3 billion to shareholders via $759 million in dividends and $2.3 billion in share repurchases.
Feinseth ranks No. 239 among more than 8,900 analysts tracked by TipRanks. His ratings have been profitable 60% of the time, with each delivering an average return of 11.9%. (See TMUS Stock Buybacks on TipRanks)