Investors are always searching for the stocks that offer the most compelling investment opportunities. More often than not, these are the stocks that go above and beyond in terms of growth prospects. While looking for these kinds of investments, we turned to the TipRanks stock screener to zero in on three stocks garnering praise from the Street. We filtered the results to show stocks with “strong buy” consensus ratings, narrowing our search down to the stocks with over 100% upside potential from the current share price.
Let’s take a closer look at these 3 ‘Strong Buy’ stocks that analysts believe could double in 2020.
Dropbox (DBX) - 112% Upside.
The file hosting service just got a vote of confidence from investment banking firm JMP Securities following a mixed Q2 earnings release that sent shares tumbling. While the company's revenue reached $401.5 million, up 18% year-over-year, investors throw in the towel on the stock in light of disappointing billings and deferred revenue.
JMP's Patrick Walravens, a five-star analyst according to TipRanks, stated that he believes the results suggest the company is stabilizing thanks to new pricing and product offerings. As a result, Walravens reiterated a Buy rating on DBX stock, with $37 price target, which implies 112% upside potential.
While the company’s $410.4 million in billings were widely considered to be disappointing, Walravens points out that a the company's shift in strategy can potentially drive further growth. DBX announced in June that it’s launching a new desktop app for Windows and Mac. Not to mention the company has made substantial efforts to expand its reach through new partnerships as well as its HelloSign acquisition.
“We like how Dropbox is working to do a better job serving the needs of its more than 500M registered users and monetizing those users, and our sense is that the tone of business has improved internally as a result,” the analyst explained.
Walravens is clearly not the only analyst with an optimistic outlook on the software company, as TipRanks analytics indicate that DBX has a ‘Strong Buy’ analyst consensus. The stock has a $30 average price target, boasting 74% upside potential. (See DBX’s price targets and analyst ratings on TipRanks)
Iteris (ITI) - 120% Upside
Iteris investors had reason to be excited after the applied informatics company posted a Q1 EPS beat earlier this month. ITI has also placed a renewed focus on its core transportation business, with this becoming especially clear after its $10.7 million Albeck Gerken acquisition. The company can now utilize Albeck’s significant capabilities in transportation systems management and operations and expand its reach in the Midwest and Mid-Atlantic segments of the market.
Joseph Osha, a 3-star analyst, believes that ITI looks poised to achieve organic growth for the current fiscal year. Osha does point out that while Q1 revenues were flat year-over-year, he expects the its core transportation business to drive continuous upside. More growth could even come if the company limits its AgTech exposure, except to the extent that technology in the division supports the company’s transportation efforts.
As a result, Osha reiterated a Buy rating on ITI stock, while raising the price target from $10 to $11, which represents nearly 120% upside from current levels. (To watch Osha's track record, click here)
“We like ITI’s substantial relationship with HERE Technologies, one of the larger competitors in location and mapping data, which has raised more than $3 billion in equity capital to date. We think that 10% plus may be a sustainable rate of growth for ITI’s transportation businesses, and more generally we believe that ITI’s competitive positioning is improving,” Osha added.
All in all, Iteris stock looks like a very compelling investing opportunity, as TipRanks analytics showcasing the stock as a Strong Buy. With an average price target of $9.17, analysts are predicting massive upside potential of 83% for the stock. In total, Iteris stock has received 3 'buy' ratings in the last three months. (See ITI’s price targets and analyst ratings on TipRanks)
The Lovesac Company (LOVE) - 170% Upside
The last stock on our list is a furniture maker specializing in a patented modular furniture system called Sactionals. The stock hasn’t gotten love from investors recently as shares have plummeted about 60% since May's highs.
The trouble with LOVE stock can be attributed to comments made by management in June that the increase in tariffs could adversely impact adjusted EBITDA. However, LOVE has made efforts to alleviate some of the impacts of tariffs by shifting production to Vietnam, negotiating for factory costing support and considering subtle price increases via changes to promotional trigger limits.
Canadian investing firm Canaccord Genuity has recently hosted meetings with members of LOVE’s management team to try and clear up some of this confusion. Analyst Camilo Lyon noted that the tone of the meetings was positive as the company expressed that it had made substantial efforts in maintaining its continued long-term growth and market share gains. As part of these efforts, LOVE is expected to release a low-tech Sactional extension similar to the roll arm and teased a high-tech product introduction next year in collaboration with “a well-known US tech company”.
Based on LOVE’s upward trajectory, the analyst reiterated his Buy rating on LOVE with $49 price target, which suggests the stock could surge nearly 170% over the next twelve months. (To watch Lyon's track record, click here)
“Aside from the near-term noise of tariffs, LOVE’s growth story remains intact. Given the brand’s paltry brand awareness that hovers around 2%, coupled with its disruptive, patent-protected modular Sactional designs, we see multiple years of solid market share gains ahead,” Lyon added.
All in all, most of the Street have not given up on the company just yet, as TipRanks analytics showcase LOVE as a Strong Buy. Out of 3 analysts polled in the last 3 months, all 3 are bullish on LOVE stock. With a potential upside of 116%, the stock’s consensus target price stands at $39. (See LOVE’s price targets and analyst ratings on TipRanks)