Top Wall Street analysts say these stocks have the best growth prospects

While macro uncertainty continues to distract buyers, it’s prudent to deal with firms which can be well-positioned to navigate challenges with their strong execution and ship enticing growth over the long run by capitalizing on secular tendencies. 

Here are 5 such stocks chosen by Wall Street’s high analysts, in keeping with TipRanks, a platform that ranks analysts based mostly on their previous efficiency.

First, we’ll take a look at cybersecurity options supplier Zscaler (ZS). Earlier this month, the firm reported its fiscal fourth-quarter outcomes and outlook, which topped Wall Street’s expectations. That stated, administration cautioned that offers are taking longer to shut as a result of a difficult macro backdrop.

Praising Zscaler’s efficiency, TD Cowen analyst Shaul Eyal stated that the rising demand for the firm’s Zero Trust options and disciplined spending drove the fourth-quarter outperformance.

The analyst famous that over the previous seven quarters, Zscaler’s annual recurring income (ARR) has doubled to $2 billion from $1 billion. Other fascinating factors that the analyst targeted on included the firm’s massive offers, a robust pipeline, and rising federal contracts. (Zscaler serves 12 of the 15 U.S. cabinet-level businesses.)  

Further, the firm continues to spend money on AI and sees enormous growth potential for its AI-powered options. It supplies information safety capabilities to stop the leakage of delicate information by generative AI.  

Overall, the analyst reiterated a purchase ranking on ZS inventory with a value goal of $195, saying, “Investments in AI, Cloud and go-to-market are set to speed up growth.”

Eyal holds the ninth place amongst greater than 8,500 analysts tracked on TipRanks. In all, 70% of his rankings have been worthwhile, with every producing a median return of 25.5%. (See Zscaler’s Financial Statements on TipRanks)

Another cybersecurity inventory on this week’s checklist is CrowdStrike (CRWD), which just lately reported upbeat fiscal second-quarter outcomes and issued strong steering.

In response to the spectacular efficiency, Needham analyst Alex Henderson raised his value goal for CRWD inventory to $200 from $170 and reiterated a purchase ranking on the inventory. The analyst famous that the firm achieved robust growth in new merchandise beneath its Identity, Cloud, and LogScale Security Information and Event Management (SIEM) choices.

The analyst additionally highlighted administration’s commentary about the firm’s generative AI cybersecurity product referred to as Charlotte AI, which they imagine can immensely enhance execution for purchasers by automating workflows. He added that the use of AI helped the firm improve its personal adjusted working margin, which elevated by 472 foundation factors to 21.3% in the fiscal second quarter.

Henderson referred to as CRWD one in every of his high suggestions in cybersecurity and stated, “Crowd is taking market share with comparatively secure pricing and robust new product uptake.”

The analyst additionally stated that the firm’s managed companies, that are core to the Falcon Complete providing, are having fun with excessive demand and differentiate the platform from others like Microsoft (MSFT).    

Henderson ranks 162nd amongst greater than 8,500 analysts tracked by TipRanks. His rankings have been worthwhile 58% of the time, with every ranking delivering a return of 15.1%, on common. (See CrowdStrike’s Technical Analysis on TipRanks) 

Next up is Mexican quick meals chain Chipotle Mexican Grill (CMG). Baird analyst David Tarantino, who ranks 357 out of greater than 8,500 analysts on TipRanks, stated that CMG stays his high concept for buyers with a 12-month horizon.

The analyst noticed that the inventory has pulled again since the blended second-quarter outcomes as a result of considerations about late Q2 2023 and early Q3 site visitors, subdued Q3 restaurant margin outlook, and macro elements. Nevertheless, he feels that this pullback has created a pretty alternative to purchase CMG inventory based mostly on a number of optimistic catalysts that might emerge in the months forward.

“Specifically, we anticipate indicators of robust same-store site visitors momentum and additional pricing actions to result in an upward bias to EPS estimates and assist strong valuation metrics on CMG heading into year-end,” stated Tarantino.

Additionally, he sees the chance of CMG accelerating its unit growth to the excessive finish of its goal of 8% to 10% yearly, supported by the hiring of further building managers this yr. Tarantino estimates {that a} mixture of about 10% unit growth and mid-single-digit comparable gross sales might drive low-to-mid teenagers income growth and greater than 20% EPS enhance, a profile which he believes deserves a premium valuation.

Tarantino reaffirmed a purchase ranking on CMG inventory with a value goal of $2,400. His rankings have been profitable 62% of the time, with every ranking delivering a median return of 10%. (See CMG Hedge Fund Trading Activity on TipRanks).

Athletic attire retailer Lululemon (LULU) impressed buyers with its fiscal second-quarter efficiency and improved outlook. The firm skilled robust momentum in North America and a spike in its worldwide enterprise, primarily as a result of strong gross sales in China.

Commenting on the 61% growth in gross sales from Greater China, Guggenheim analyst Robert Drbul stated that he continues to imagine that China holds vital growth potential for Lululemon, as the firm goals to quadruple worldwide revenues by 2026. He additionally highlighted that Lulu intends to open a majority of its 35 new worldwide shops, scheduled for this yr, in China. 

The analyst raised his Fiscal 2023 and 2024 earnings estimates and believes that demand for the firm’s merchandise stays robust, as aggressive pressures from upcoming athletic manufacturers appear overestimated.  

Drbul maintained a purchase ranking on LULU and a value goal of $440, justifying that the firm “stands to profit from favorable secular tailwinds (well being, wellness, casualization, and health, together with at-home).”

Drbul ranks No. 958 out of greater than 8,500 analysts tracked on TipRanks. Additionally, 57% of his rankings have been worthwhile with a median return of 5%. (See Lululemon Insider Trading Activity on TipRanks)

The final inventory on this week’s checklist is Acushnet Holdings (GOLF), a producer of golf merchandise. Tigress Financial analyst Ivan Feinseth believes that the firm is well-positioned to profit from the ongoing growth in golf, pushed by product launches and biannual new golf ball design introductions.

The analyst highlighted that GOLF’s robust model title continues to be a growth catalyst, as its Titleist model golf balls stay the most popular alternative of PGA and LPGA Tour gamers. He additionally famous the robust growth in Titleist golf golf equipment, Titleist gear, and FootJoy golf put on segments, fueled by a variety of progressive launches, together with new TSR fashions that quickly emerged as the most-played mannequin on the PGA tour.

Feinseth elevated his value goal for GOLF to $68 from $62 and reiterated a purchase ranking, whereas emphasizing that the firm is enhancing shareholder returns by ongoing dividend will increase and share repurchases.

“GOLF’s unimaginable model fairness, pushed by its best-in-class and industry-leading product traces, together with FootJoy and Titleist, are main property and the major drivers of its premium market valuation,” stated Feinseth.  

Feinseth holds the 289th place amongst greater than 8,500 analysts tracked on TipRanks. His rankings have been worthwhile 58% of the time, with every ranking delivering a median return of 10.9%. (See Acushnet Stock Chart on TipRanks)