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

While macro uncertainty continues to distract traders, it’s prudent to give attention to corporations which are well-positioned to navigate challenges with their stable execution and ship enticing growth over the long run by capitalizing on secular developments. 

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

First, we are going to 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 because 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 attention-grabbing factors that the analyst targeted on included the firm’s giant offers, a powerful pipeline, and rising federal contracts. (Zscaler serves 12 of the 15 U.S. cabinet-level businesses.)  

Further, the firm continues to put money into AI and sees large growth potential for its AI-powered options. It gives information safety capabilities to stop the leakage of delicate information by way of generative AI.  

Overall, the analyst reiterated a purchase score on ZS inventory with a worth 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 scores have been worthwhile, with every producing a mean return of 25.5%. (See Zscaler’s Financial Statements on TipRanks)

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

In response to the spectacular efficiency, Needham analyst Alex Henderson raised his worth goal for CRWD inventory to $200 from $170 and reiterated a purchase score on the inventory. The analyst famous that the firm achieved sturdy growth in new merchandise underneath 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 consider 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 among his high suggestions in cybersecurity and stated, “Crowd is taking market share with comparatively secure pricing and powerful 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 scores have been worthwhile 58% of the time, with every score 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 thought for traders with a 12-month horizon.

The analyst noticed that the inventory has pulled again since the combined second-quarter outcomes because of issues about late Q2 2023 and early Q3 site visitors, subdued Q3 restaurant margin outlook, and macro components. Nevertheless, he feels that this pullback has created a beautiful alternative to purchase CMG inventory primarily based on a number of constructive catalysts that would emerge in the months forward.

“Specifically, we count on indicators of sturdy 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 risk of CMG accelerating its unit growth to the excessive finish of its goal of 8% to 10% yearly, supported by the hiring of extra development managers this 12 months. 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 improve, a profile which he believes deserves a premium valuation.

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

Athletic attire retailer Lululemon (LULU) impressed traders with its fiscal second-quarter efficiency and improved outlook. The firm skilled sturdy momentum in North America and a spike in its worldwide enterprise, primarily because 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 consider that China holds important 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 12 months, in China. 

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

Drbul maintained a purchase score on LULU and a worth 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 scores have been worthwhile with a mean return of 5%. (See Lululemon Insider Trading Activity on TipRanks)

The final inventory on this week’s listing 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 sturdy model title continues to be a growth catalyst, as its Titleist model golf balls stay the most popular selection of PGA and LPGA Tour gamers. He additionally famous the sturdy 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 worth goal for GOLF to $68 from $62 and reiterated a purchase score, whereas emphasizing that the firm is enhancing shareholder returns by way of ongoing dividend will increase and share repurchases.

“GOLF’s unimaginable model fairness, pushed by its best-in-class and industry-leading product strains, together with FootJoy and Titleist, are main belongings 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 scores have been worthwhile 58% of the time, with every score delivering a mean return of 10.9%. (See Acushnet Stock Chart on TipRanks)