Stocks like Planet Fitness & ChargePoint are winners in this market
Investors scrambling for safety amid the persistent market downturn have plenty of buying opportunities, analysts said this week. An attractive number of stocks are still available that offer great upside, analysts say. This is despite growing fears that the economy will fall due to an inflation spike that has been 40 years. CNBC Pro reviewed Wall Street research recently to identify companies poised for success in these uncertain times. Planet Fitness, Pure Storage, ChargePoint Interactive Brokers and Entegris are some of them. DA Davidson, an investment firm, said that ChargePoint is the only company riding the electric car boom. However, ChargePoint still stands out in a volatile market with investors worried about inflation, supply chain problems, and high demand. This is not to suggest that ChargePoint hasn’t been affected by macro headwinds. The company’s June 1 earnings report showed a disappointing gross margin. Summerville maintained his buy rating, and stands by the stock. According to the analyst, there are a variety of catalysts supporting his bullish thesis. These include ChargePoint’s unique first-mover advantage. His note stated that “we remain confident that CHPT would reach adjusted EBITDA or FCF positivity within the calendar year 2024” and that shares offered an attractive risk/reward ratio at present levels, given that we take into account the whole electric vehicle charging infrastructure. ChargePoint shares are up 12.5% this month. Summerville explained that CHPT “continues to operate at an exceptionally high level in an extremely challenging environment because demand outstrips supplies.” Cowen Investments named Planet Fitness the top SMID-Cap company idea. Analyst Max Rakhlenko stated that “PLNT is at the nexus powerful secular shifts which will support growth and is further fueled through its $250mm growing ad funds, accelerating it flywheel.” According to the company, investors don’t appreciate long-term opportunities and that younger consumers are more interested in health and fitness. Rakhlenko said he is confident that the company will continue to add members and to expand its portfolio of gyms. Rakhlenko is also confident that Planet Fitness experienced its greatest growth in 2008 and 2009. He stated that he expects continued usage and improvements in membership trends over the next quarters. This includes usage returning to 100 percent of 2019, and a growing number of older gyms returning their membership levels from before the pandemic. The stock shares have fallen 23.8% but its valuation remains attractive. “PLNT is well positioned to succeed in both better & more challenging backdrops,” Rakhlenko added. Goldman Sachs: Pure Storage While the news about negative tech headlines has some investors worried, the manufacturer of flash-based data storage systems appears to be on top of things. After the firm’s strong top and bottom-line earnings reports earlier in March, Pure Storage believes it is poised for further upside. Analyst Rod Hall sent clients a letter stating that “Solid beat” and the ability to raise the quarter in difficult circumstances. According to the firm, Pure Storage is still executing flawlessly without any impact on customers’ needs. “At this stage we view Pure’s Supply Management as superior than most other companies within our coverage of the IT hardware sector,” he said. Hall was also bullish about Pure Storage’s potential partnership with Meta Platforms while the social media company is building its artificial intelligence platform. According to the company, “We view this Meta opportunity in FY 23 as a significant revenue tailwind” This year, shares are down nearly 20%. The analyst also has a high Street price target for $50 per share. Hall stated that Pure products continue to be popular with service providers and enterprises. Hall also said, “We see continued strong results as an indicator that Pure’s products have an increasing following.” Interactive Brokers- Compass Point, Rating “Strong Account Growth Persists despite a Challenging Environment.” Yesterday, IBKR reported on May activity [June 1]NNA growth (net new asset growth) of 42.4k was 27%, this is very high growth given the market challenges we saw. We believe that IBKR is putting up solid results in challenging markets. The continued high account growth will continue to pay dividends long-term. Entegris Stifel, Buy rating … .We believe secular trends in the semiconductor industry are catalysts to Entegris’ growth prospects, & we are very confident that trends like increased materials engineering & capital intensity trends for contamination control will support this outlook. Still Outperforming the Market in a Challenging Climate. ChargePoint- DA Davidson. Buy rating. “Overall CHPT continues its operations at a high level in a challenging environment. Demand outstrips supply. As we look at the wider EVCI market, we believe that CHPT will attain adjusted EBITDA or FCF positivity within calendar 2024. We also maintain our belief in shares offering attractive risk/reward. A capital-light business model that focuses on the most attractive parts of the electric vehicle charging industry. Planet Fitness- Cowen, Outperform Rating “PLNT is at the nexus powerful secular shifts which will support growth. It’s further fueled with its $250mm and growing ad funds, accelerating its flywheel. … .We expect ongoing usage & membership trend improvements over the coming quarters, including usage to return to 100% of 2019’s levels, & an increasing number of mature gyms returning to their pre-pandemic membership levels. … .PLNT is well positioned to succeed in both better & more challenging backdrops.” Pure Storage- Goldman Sachs, buy rating “Solid beat and raise quarterly in a difficult environment.” We see the Meta opportunity as an important revenue tailwind to Pure for FY’23. We also believe that Pure products continue to be popular with service providers and enterprise customers. … . Pure’s supply control is, at this stage, superior to that of all the other companies we cover in the IT hardware space.