Stock Groups

Analysts see upside in stocks like Amazon & Salesforce

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An Amazon worker delivers packages amid the coronavirus disease (COVID-19) outbreak in Denver, Colorado, April 22, 2020.

Reuters Though the markets are off from their highs, analysts believe that several companies still have room to grow.| Reuters

Though the markets are off from their highs, analysts believe that several companies still have room to grow.

Some of Wall Street’s most respected analysts have made bullish predictions about these stocks due to innovations in point-of sale technology and acquisitions of Buy Now, Pay Later firms. TipRanks unique data allows investors to identify the best analysts and gives them a guideline for choosing who to invest in.  

The best analysts of this business have carefully analyzed these companies’ outlooks and their fundamentals.  

PayPal  

As e-commerce trends increase, consumers are looking to buy now, pay later firms to help facilitate their purchases. Companies often seek payment processing companies to facilitate mergers or acquisitions. This is why analysts are upbeat about PayPal Holdings, Inc. (PYPL), which recently announced a takeover of Japanese buy now, pay later platform Paidy.  

Jason Kupferberg, from Bank of America, expressed his optimism about the subject. He wrote that PayPal will be able to expand its capabilities in Japan and open it up to a large potential BNPL market. Japan ranks third in the world for ecommerce, offering significant potential to penetrate a predominantly cash-based society.  

Kupferberg reiterated the Buy rating and stated a target price of $323 for the stock.  

According to the five-star analyst, Paidy will close by Q4 this fiscal year. Paidy has been enjoying significant success with its revenues and volumes growing more than 100 percent year-over-year. Japanese firm Paidy consolidates its customers’ payments in one bill. This provides merchants with value by increasing their number of repeat customers and increasing their spending. (See PayPal risk factors on TipRanks) 

Declaring PayPal’s stock a “top pick in payments,” Kupferberg does not see significant competitive disruption from Amazon’s (AMZN) recently announced partnership with buy now, pay later service Affirm (AFRM).  

TipRanks rates Kupferberg at #216 among the more than 7,000 global analysts. With a 69% success rate, Kupferberg has an average return of 16.6% for each rating.  

PowerSchool  

During the pandemic, companies that helped facilitate students who were blocked from studying in-class saw upside. Many schools across North America have reopened for the new school year. This time, however, students are in the classroom. As a K-12 education software firm, PowerSchool Holdings, Inc. (PWSC) has the capacity to capture both types of educational markets.  

Jefferies Group analyst Brent Thill said that while the stock price experienced significant growth since July 28, 2007, it still remains an attractive value. According to Thill, “PWSC is a market leader and highly integrated K-12 software suite that positions it as a platform.” 

Thill upgraded his price target from $32 and gave it a Buy rating.  

PowerSchool’s earnings were in line with Wall Street estimates. But, the revenues are strong across grades. As schools reopen, and students return to classrooms in the real world, this demand will likely continue. (See PowerSchool stock charts on TipRanks) 

The company’s subscription revenue has been ramping up, and existing customers are sticking around and upgrading their purchased packages. International markets are a viable long-term strategy. There is an estimated 1.3 billion students worldwide.  

Five-star analyst, was enthusiastic about PowerSchool’s growth in active users during the first half 2021. This shows that the company is still relevant in an almost post-pandemic world. A high-profile deal was recently struck with Miami-Dade County Florida to highlight the company’s value for major metropolitan school districts.  

Thill is ranked #20 among more than 7,000 experts on TipRanks. According to his ratings, he has an 88% success rate and returns on average 29.2% per rating.  

Harley-Davidson  

An iconic brand with an incredibly loyal customer base, Harley-Davidson, Inc. (HOG) has seen its status lag over the last few years. The brand was a popular choice for an older consumer group, however, millennials now have the money to buy motorcycles. Harley-Davidson recently made strides in adapting to market changes and increasing profits. (See Harley Davidson blogger sentiment on TipRanks) 

Stating that the company has already “turned a corner,” Ivan Feinseth of Tigress Financial Partners asserted a bullish thesis on the stock. His strong brand equity and innovative capabilities, along with the continued rollout of new products, international expansion, and a long-term track record of returning cash to shareholders will all help HOG create more long-term shareholder value. 

Feinseth gave the stock a Buy rating and set a target price of $56.  

According to the analyst, Harley-Davidson’s valuation at present is appealing for entry. The strong quarterly revenue reports also show significant upside. This company is expected to make strategic investments and raise dividends. Share buybacks will be made easier by improving the balance sheet and its free cash flow.  

A new brand of standalone electric motorcycles, the LiveWire One has been launched. The electric motorcycle is a company attempt to keep up with changing consumer trends.  A certified pre-owned program provides Harley-Davidson direct exposure to the motorcycle used market.  

Feinseth believes there are opportunities to monetize in Harley-Davidson’s existing Harley owner purchases of customized branded accessories, and in its push for international expansion.  

TipRanks has placed Feinseth at #75 among more than 7,000 expert financial analysts. His stock rating success rate was 72%. He also returned an average return of 20% on every one.  

Salesforce  

If there was one glaring trend that emerged from the Covid-19 pandemic, it was the accelerated digital transformation. All sizes of businesses and enterprises were forced to go online by work-from-home mandates. Even with employees moving back to their offices, this larger shift toward digitization is here to stay, and Salesforce, Inc. (CRM) is there to capitalize on the shift.  

Brian White of Monness bullishly hypothesizes that Salesforce’s unique platform is “more relevant than ever,” and is poised to capture much of the digital transformation trend.  

White reiterated his Buy rating of CRM and stated a target price of $300.  

Slack was acquired by the software giant in a high-profile deal last July. Salesforce’s annual conference Dreamforce will be held soon and White anticipates that the new addition will grab most of the attention of investors.  

The five-star analyst also announced a whole range of Slack integrations last month. White expects that Dreamforce will feature even more innovative solutions. Particularly confident about the future, he wrote that Slack “not just believes it can significantly increase the Salesforce platform value but also offers incremental financial flexibility to the company over the next 12–18 months.”  

Looking beyond Slack and its potential, other acquisitions by Salesforce, notably MuleSoft and Tableau,  have already turned out successfully.

TipRanks, a financial data aggregator, currently ranks White at #38 among more than 7,000 qualified financial analysts. White’s success rate is 79% according to the site. He also returns an average return of 29.2% for each rating.  

Amazon

While e-commerce trends took off throughout the pandemic, Amazon (AMZN) has now been investing in brick-and-mortar retail spaces, and is now developing a new way to pay for products. Justin Post, a Bank of America representative, said that the multi-national conglomerate was working on new point-of sale technology for its bookstores and supermarkets. This hardware and software could also be integrated in third-party companies, according to Post. (See Amazon hedge fund trading activity on TipRanks)  

Post reiterated his Buy rating on the stock and added a 12-month price target of $4,250.  

The five-star analyst noted this new innovation would be implemented in congruence with the company’s delivery channels and its new palm-scanning payment system, Amazon One. Once incorporated by small- and medium-sized businesses, the tech could compete with other point-of-sale firms like Square (SQ) and PayPal (PYPL).  

Post said that small- and medium-sized businesses needed to be more connected with customers because of the Covid-19 epidemic. Local businesses can provide several ways to generate sales. Amazon technology offers valuable business analytics that will help sellers. 

Amazon will sell the point-of sale tech to third party retailers. However, Amazon customers will be able pay in retail stores through their Amazon accounts. Post notes that the product will offer “deep integration with Amazon’s marketplace, fulfillment, checkout, and payments processing capabilities,” in order to allow Amazon to continue competing with marketplaces like Shopify (SHOP) and Google (GOOGL).  

Post has a TipRanks rating of 43 out of over 7,007 expert analysts. Post has a success rate of 74% on his ratings and returns an average 29% each time.

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