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Yahoo
18-02-2025
- Business
- Yahoo
These 2 ‘Strong Buy' Tech Stocks Soared Over 70% in a Year — Raymond James Says the Rally Isn't Over
Tech investors have been riding high in recent years, as surging technology stocks have propelled a powerful market rally. But after two years of solid gains, could the momentum be running out of steam? Leverage the power of TipRanks' Smart Score, a data-driven tool to help you uncover top performing stocks and make informed investment decisions. Monitor your stock picks and compare them to top Wall Street Analysts' recommendations with Your Smart Portfolio Not so fast, says Raymond James analyst Josh Beck, who ranks among the top 1% of analysts on TipRanks. Beck remains firmly in the bullish camp, particularly when it comes to the internet segment, where he sees plenty of room for growth. 'We remain bullish on the internet sector… The year ahead marks a crucible moment for GenAI commercialization as capex concerns could be assuaged as assistant-oriented use cases quickly develop into more agentic flows across consumer/enterprise software and HardTech applications. HardTech, broadly defined, could develop into a more mainstream technology as Robotaxis scale and Humanoid activity ramps. The macro is on steadier footing with 2024/25 real GDP projections of 2.5%/2.1% (vs. 1.4%/1.8% last year),' Beck opined. Translating his stance into specific recommendations, Beck has tagged two 'Strong Buy' tech stocks as potential winners for the coming year. These stocks have already surged 70% or more over the past year – but according to Beck, the rally isn't over. Let's take a closer look at his top picks. Ltd. (WIX) The first Raymond James pick we'll look at is Wix, the company that brought the do-it-yourself mindset to the field of web design. Wix is known for its website building platform, which is based on the WYSIWYG (what you see is what you get) concept; users don't need any experience in coding, computer language, or website architecture, but rather can build a site using a set of intuitive click-and-drag tools. The model has proven popular, and Wix today boasts over 250 million users, in 190 countries, creating more than 85,000 websites every day. Wix operates on the freemium model, making its basic tools, platforms, and tutorials available to all comers free of charge – with more advanced platform upgrades available by subscription. The model avoids trial periods, letting all users have access to basic services, and attracts subscriptions through the quality of those services. In effect, Wix is its own best advertisement. Recently, Wix added a business-centric platform to its product line, Wix Studio. This web design platform is purpose-built to meet the needs of enterprise users and clients, and includes features such as automatic scaling and no-code animations. Wix has integrated AI technology into the platform, to give users a set of intelligent tools, and the platform even supports application development. The introduction of Wix Studio marks a shift for the company, towards a more business-oriented clientele. The company began recording full-year profits in 2023, and continued that into 2024. In its last reported quarter, 3Q24, Wix had a top line of $444.7 million, up 13% year-over-year and some $740,000 over the estimates; the non-GAAP EPS figure of $1.50 was 7 cents better than had been anticipated. Looking ahead, Wix is expected to report its 4Q24 results this week – analysts are looking for a top line of $461.4 million and an EPS of $1.61. We should note here that WIX shares have gained 72% over the past 12 months. Turning to analyst Beck and the Raymond James view of Wix, we find that the tech expert is impressed by the Wix Studio product, and writes, 'Wix's new web-building product for agencies, Wix Studio, is gaining significant traction and market share among professional web design agencies (based on agency checks) with over 1M users in less than a year and 75% of new Partner bookings were built on Studio. Wix Studio brings multiple benefits to WIX's growth algorithm as it attracts more complex website builds from larger, more mature businesses, which tend to purchase higher-value plans, have higher GPV processed online (Partners comprise one-third of accounts but 50% of GPV), and have better retention rates due to a lower chance of failing.' 'That,' according to the analyst, 'should help drive a dual acceleration in growth and profitability potentially setting up a multi-year path to a mid-40s RoF with Partners potentially more than 50.' Beck quantifies his stance on WIX with a Strong Buy rating and a $300 price target that implies the shares will gain 34% in the coming year. (To watch Beck's track record, click here) Overall, WIX's Strong Buy consensus rating is based on 20 recent analyst reviews, that break down to 16 Buys, 3 Holds, and 1 Sell. The shares are priced at $223.70 and their $242.76 average price target suggests a one-year upside potential for the stock of 8.5%. (See WIX stock forecast) Reddit, Inc. (RDDT) Next on the list is Reddit, the popular user-generated social media content and discussion site. Reddit was founded in 2005 and today boasts more than 101 million daily active users, who participate in a 'community of communities,' posting original user content, participating in discussions, and just talking about anything and everything, from news to hobbies to individual passions. The company went public through an IPO a little less than one year ago and has been an investor favorite since; the stock has seen some outsized gains – up by 318% since it entered the public realm. Reddit, however, hit a speed bump recently and the stock has pulled back following the release of its 4Q24 results on February 12. In that data set, Reddit reported higher-than-expected R&D expenses, which were up to $188.6 million, and lower-than-expected 'Daily Active Uniques,' or DAUq, its measure of daily active users, which was up 39% year-over-year. In addition, Google made changes to its algorithm that caused a negative impact on Reddit's traffic and DAUq numbers. Nevertheless, Reddit's Q4 headline numbers – the revenue and earnings figures – both beat the forecasts. The company's top line of $427.7 million was up 71% year-over-year and was $22.16 million better than had been anticipated, while the EPS of 36 cents was 11 cents per share over the estimates. The company realized a gross margin in Q4 of 92.6% and of 90.5% for the full year 2024. In an interesting note, Reddit made it known last week that it will be introducing a paywall around some content over the course of this year. The company's CEO said that Reddit will be introducing 'paid subreddits,' which will contain content only accessible to paying subscribers. Turning again to Beck, we find that he is upbeat on Reddit, recommending investors make use of a buying opportunity. He says, 'Reiterate Strong Buy on RDDT and would be buyers on the pullback as late quarter Google algorithm changes (note Google core update December 12-18) contributed to an unexpected U.S. DAUq miss (48M vs. Street 51.5M) and given the importance of later quarter ad spend likely constrained the upside to a ~5% beat, below our preview that contemplated a ~9.5% beat. Management commentary indicated a sharp DAUq recovery which we think was likely driven by 1) Google benefiting from deeper Reddit crawling 2) Reddit uncollapsing comments in search results, and 3) a potential benefit from spam reduction algo updates (Reddit pre-filters via moderation).' Referring specifically to the 4Q earnings report, the analyst goes on to say, 'While the report did not clear our anticipated bar, we walk away encouraged by international upside (DAUq + ARPU), ad progress (performance, manager, formats) and early positive response from Answers that likely is combined with Search to improve on-platform searchability.' As noted, Beck put a Strong Buy rating on this stock – and he complemented that with a $250 price target, showing his confidence in a potential upside this year of 27%. RDDT shares have picked up 19 recent analyst reviews, and these include 13 to Buy, 5 to Hold, and 1 to Sell – adding up to a Moderate Buy consensus rating from the Street. Reddit's stock is selling for $196.38, and its $206.50 average target price implies that it will gain 5% on the one-year horizon. (See RDDT stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a 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. Sign in to access your portfolio
Yahoo
17-02-2025
- Business
- Yahoo
Why Investors Shouldn't Chomp on the Robinhood (HOOD) Stock Bait
If you're looking for a fast, commission-free path to stock investment, Robinhood Markets (HOOD) is a platform both traders and investors should consider. In recent years, the disruptively brash platform has courted both retail investors and pros alike. With a steady influx of new investors entering the market, Robinhood is well-positioned to maintain its user base and revenue growth over time. However, despite the platform currently enjoying a flurry of new activity and, in turn, sturdy revenues, its valuation leaves me feeling neutral. Leverage the power of TipRanks' Smart Score, a data-driven tool to help you uncover top performing stocks and make informed investment decisions. Monitor your stock picks and compare them to top Wall Street Analysts' recommendations with Your Smart Portfolio Robinhood shook up the retail trading sector by slashing trading costs even further than the likes of Charles Shwab and E-Trade could. Moreover, as the company's name suggests, Robinhood wants to disrupt the highly gated community of financial investing and introduce it to the common man. The retail-investor-focused marketing pitch is opening the door to stock investing for swathes of retail investors. Its intuitive platform now supports a wide range of financial instruments, including cryptocurrency, futures, and index options—allowing many users to manage their entire portfolio in one place. The disruptive no-cost broker is making another bold move: launching a low-cost advisory service with a minimum investment of just $50 and an annual fee of 0.25%. This initiative can potentially foster a more financially literate retail investor base. In FY2024, Robinhood delivered impressive financial growth, with net revenue soaring 58% year-over-year and assets under custody climbing 88%. Even more striking, adjusted EBITDA surged 167%—a clear sign of the company's strengthening profitability. Given these results, it's no surprise the market reacted bullishly to HOOD's latest earnings report earlier this week despite the stock's forward P/E exceeding 50. Robinhood's management projects another year of strong double-digit revenue growth in 2025, reinforcing confidence in its long-term trajectory. With results exceeding projections on a regular basis, the big question now is whether Robinhood can sustain its trading volumes and market expansion—or if valuation concerns and bullish fatigue will finally catch up to this plucky financial liberator. Robinhood faces competition from platforms like eToro, Webull, Moomoo, and Lightyear. However, its first-mover advantage has secured a dominant market position, providing HOOD investors with a strong moat. As things stand, the company is capped at ~$60 billion, which is no mean feat for a broker specializing in retail order flow. Still, any market missteps by HOOD's management could weaken the company's people-power edge over time. Robinhood's cryptocurrency segment has seen remarkable growth, with a 700% year-over-year increase in crypto transaction revenue in Q4 2024, totaling $358 million. This surge is further bolstered by the company's strategic acquisition of Bitstamp, the world's longest-running crypto exchange, for approximately $200 million. This move is anticipated to expand Robinhood's global reach and attract a broader base of dedicated crypto investors, potentially driving significant growth in transaction-based revenue over the next decade. Another interesting angle with HOOD is its exposure to market themes that could potentially become very lucrative later this year. More specifically, HOOD is currently developing services that are presently being balked at by regulators, such as offering crypto and leveraged stock trading to retail investors. However, the tides could shift with Donald Trump, Elon Musk, and a fleet of tech pioneers leading the charge to advance society into tomorrow's world. It is conceivable to see cryptocurrencies legitimized en masse via a pro-Trump SEC chief, for investing rules and regulations to be drastically relaxed, for AI-powered innovations to be fast-tracked, and for speculative market activity (including volatility) to rise as a result. In addition, there is the specter of further geopolitical ramifications on an international scale, with DeepSeek, Alibaba (BABA), and other Chinese disruptors adding further volatility to markets. The above would be a massive boon for HOOD's balance sheet and its shareholders. Although some label Robinhood as a meme stock, I believe that overlooks its solid business foundation and competent management. However, the company's revenue has fluctuated over the years without consistent growth. HOOD bulls will point to reinvigorated metrics in 2024 and will point to the company's next earnings call on 7 May as a milestone that could prove all the naysayers wrong. Considering that reported figures lag market activity, May's figures will likely be impacted by elevated market volatility due to Trump's market entry, so HOOD bulls will expect a strong report. Brokers of all sorts and varieties blossom when markets are volatile and waste away in sideways trade. Additionally, Robinhood only turned profitable this year, and if it fails to sustain its earnings trajectory, investors should brace for intermittent stock price declines. Moreover, retail trading flows are notoriously erratic, with the average duration of a novice investor still around the 6-month mark. Retail investors burn out all too fast, and replacing old clients with new ones is getting costlier. Therefore, it's important to be cautious with Robinhood stock. The price-to-sales ratio is at all-time highs, while the 14-day Relative Strength Index is at almost 75, a technical signal that the stock is overbought and is ripe for a pullback. As a value investor, I consider this stock overbought despite a strong FY2024. Buying stock in a great company at a low price following a setback is preferable to buying stock in a great company when it's trading close to all-time highs. The market tends to overvalue stocks during times of strength, and HOOD could be a good case in point — assuming the stock delivers for investors long-term. Robinhood Markets (HOOD) has a consensus Strong Buy rating on Wall Street. Its average price target is $68.87 per share, suggesting an almost 7% upside over the next 12 months. This is based on 13 Buy, four Hold, and zero Sell ratings over the past three months. While this indicates a solid return potential, I typically seek an annual return of 15% or more for a Buy rating, so I remain neutral despite the bullish sentiment from other analysts. Robinhood could be quite a good long-term investment, but at current prices, it's just not worth paying to find out—especially when considering the company's operations and sector. The market is too excited after the company's Q4 earnings results to realize just how seasonal and gyratory retail brokerages can be. Buying in at toppy levels could leave investors long the high and then waiting for months, hoping for a scratch. Smart money tends to buy in strategically, thereby transferring wealth from the poor (uninitiated) to the rich (experienced). It is somewhat ironic that the very thing Robinhood wants to help change (systematic wealth transfer among financial insiders that leave out the common man) is the thing that could occur throughout 2025 to Robinhood clients and HOOD investors alike. Savvy investors would pause for thought and wait for better levels before committing to this stock. My personal line in the sand as to when I think it's advantageous to be a HOOD bull is when the company's price-to-sales ratio falls below 15. With a current ratio of 19.58, HOOD is not too far off reaching my mark. All things considered, HOOD could be a superb buy-the-dip opportunity later this year. Disclosure Sign in to access your portfolio
Yahoo
17-02-2025
- Business
- Yahoo
PacBio should return to growth over time, says Canaccord
Canaccord reiterates a Buy rating on PacBio (PACB) with a $3 price target following the company's Q4 report. The firm says that although PacBio forecasts modest sales growth in 2025, it remains optimistic the company should be able to return to growth over time due to new products and improved execution. Canaccord points out management incorporated National Institutes of Health-related uncertainty into its 2025 guidance. The firm is optimistic PacBio's is positioned 'relatively well' in the current environment and believes the shares do not reflect the company's growth potential. The stock in morning trading is up 24% to $1.84. Leverage the power of TipRanks' Smart Score, a data-driven tool to help you uncover top performing stocks and make informed investment decisions. Monitor your stock picks and compare them to top Wall Street Analysts' recommendations with Your Smart Portfolio Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See today's best-performing stocks on TipRanks >> Read More on PACB: PacBio price target lowered to $3.50 from $4 at TD Cowen Pacific Biosciences: Strategic Growth Amidst Funding Challenges Supports Buy Rating PacBio Navigates Financial Challenges with Strategic Advances Pacific Biosciences: Buy Rating Amidst Conservative Guidance and Strategic Growth Initiatives PacBio reports Q4 EPS (20c), consensus (17c) Sign in to access your portfolio
Yahoo
17-02-2025
- Business
- Yahoo
Applied Digital Corp call volume above normal and directionally bullish
Bullish option flow detected in Applied Digital (APLD) Corp with 53,983 calls trading, 4x expected, and implied vol increasing over 4 points to 99.64%. 2/14 weekly 9 calls and 2/14 weekly 8.5 calls are the most active options, with total volume in those strikes near 12,100 contracts. The Put/Call Ratio is 0.14. Earnings are expected on April 10th. Leverage the power of TipRanks' Smart Score, a data-driven tool to help you uncover top performing stocks and make informed investment decisions. Monitor your stock picks and compare them to top Wall Street Analysts' recommendations with Your Smart Portfolio Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See today's best-performing stocks on TipRanks >> Read More on APLD: Nebius, Applied Digital listed among Nvidia holdings in filing Applied Digital closes $375M financing to support Ellendale HPC campus Microsoft comments offer positive read-through to bitcoin miners, says Cantor 3 Best Stocks to Buy Now, 1/29/2025, According to Top Analysts Applied Digital Reports Strong Growth and Strategic Partnerships Sign in to access your portfolio
Yahoo
15-02-2025
- Business
- Yahoo
Big U.S. banks mull moves into crypto services, The Information reports
Some of the largest U.S. banks are evaluating moves into crypto services for big funds, investors and traders in order to take advantage of loosening regulations under the Trump administration, The Information's Yueqi Yang reports, citing people familiar with the matter. State Street (STT) expects to unveil digital asset custody next year, while BNY (BK) already has a small custody operation for bitcoin (BTC) and ether (ETH) with plans to expand to more tokens. Additionally, Citi (C) has also been considering adding crypto custody services by developing them itself and partnering with external firms. Leverage the power of TipRanks' Smart Score, a data-driven tool to help you uncover top performing stocks and make informed investment decisions. Monitor your stock picks and compare them to top Wall Street Analysts' recommendations with Your Smart Portfolio Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See the top stocks recommended by analysts >> Read More on STT: VGT, VHT: 2 ETFs to Buy as Vanguard Cuts Fees on Funds State Street Reports Stellar Growth Amid Challenges Twilio, Qorvo upgraded: Wall Street's top analyst calls State Street upgraded to Peer Perform from Underperform at Wolfe Research State Street price target raised to $115 from $100 at Argus Sign in to access your portfolio
