Today, I am going to focus in on seven particularly compelling stocks to share with you. These are stocks that have the power to disrupt — and have significant backing from the Street. All these stocks have a ‘Strong Buy’ rating from the best-performing analysts on TipRanks and big upside potential from the current share price.
Indeed, Amazon.com, Inc. (NASDAQ:AMZN) recently shockwaves earlier this year with its snap takeover of retail store Whole Foods. Now the company is believed to be in preliminary talks about entering the lucrative drug purchasing market.
And recent research has revealed that AMZN is the company other execs are the most worried about. CBS Insights analyzed earning call transcripts and found that Amazon’s name cropped up over 3,000 times in just one year! The list of companies mentioning AMZN span all the way from the pharmacy industry to the retail, logistics and content industries.
But AMZN is just one of the stocks I cover — so let’s take a closer look at all seven stocks now:
“Strong Buy” Disruptive Stocks: Amazon (AMZN)
This is arguably the Street’s number 1 stock right now, and the ultimate disruptor of various industries.
Last week, Amazon held its much-hyped cloud conference AWS re:Invent 2017 in Las Vegas. The company unveiled a whole host of new AI-based products- including Amazon Translate, a service for translating text from one language into another. Andy Jassy, the leader of Amazon Web Services, also highlighted how AWS is crushing its rivals in its breadth and depth of services.
Following the five-day event, analysts quickly ramped up their price targets. Top Wells Fargo analyst Ken Sena boosted his price target from $1,430 to $1,525. The new price target indicates 31% upside and is the stock’s highest price target yet. He highlighted three key reasons to be bullish on AMZN right now: 1) the “very successful” AWS event 2) “record breaking” holiday sales data; and 3) the increasing likelihood that Amazon “ultimately becomes a disruptor” in healthcare via the generic pharmaceutical business.
Meanwhile MKM Partners’ Rob Sanderson reiterated his view that Amazon represents “the best long-term growth story available to large-cap investors today.” He expects continued expansion from Amazon’s AWS cloud business over the coming quarters.
In the last three months, AMZN has received an incredible 33 buy ratings and just 1 hold rating. The average analyst price target of $1,271 suggests upside potential of 9.4%.
Bear in mind that in just three months, AMZN has already spiked from $965 to the current share price of $1,162.
“Strong Buy” Disruptive Stocks: CymaBay Therapeutics (CBAY)
From consumer giant Amazon, we turn to innovative biopharma CymaBay Therapeutics Inc (NASDAQ:CBAY).
CBAY is currently trialing its key product candidate seladelpar. This is a potent orally active PPARδ agonist for patients with the autoimmune liver disease, primary biliary cholangitis (PBC). Seladelpar poses a “disruptive threat” according to top Leerink analyst Joseph Schwartz. He notes that physicians are optimistic despite relatively limited interim clinical data. Based on this analysis, he ramps up his price target from $12 to $16 (98% upside potential).
Similarly, top HC Wainwright analyst Ed Arce likes the fact that the drug has shown no serious adverse side effects and has even reduced itchy skin. He continues: “In our view, these beneficial features put seladelpar in a very favorable position over OCA [from rival Intercept Pharmaceutical] because it addresses both the efficacy and tolerability issues… we affirm our Buy rating on increased confidence in the approvability and market potential of seladelpar.”
CBAY boasts 100% Street support right now with six recent back-to-back buy ratings. Over the last three months, share prices have exploded by 43%. Nonetheless, analysts believe that CBAY can spike a further 65% to reach $14.50 within the year.
“Strong Buy” Disruptive Stocks: SolarEdge Technologies (SEDG)
This leader in solar energy products has just delivered very impressive third quarter earnings results with “near flawless” execution. For example, SolarEdge Technologies Inc (NASDAQ:SEDG) reported record revenue of $166.5M, ahead of guidance of $155M to $165M. Plus the company took share in virtually every market — the U.S., Europe, Australia, etc.
“We’re staying buyers as this innovator is delivering what growth investors want — big revenue and margin upsides/guides (with the added benefit of solid cash flow)” comments top Canaccord Genuity analyst John Quealy.
He warns that the stock could experience some politics-linked volatility given President Donald Trump’s final import tariff decision on January 12 or 13. However, Quealy concludes “we stay constructive given the company’s disruptive technology share gains in solar power, strong cash profitability and move into ancillary power quality/reliability conversion markets more broadly (plus valuation range is on the lower end for an emerging growth name in this tape, in our view).”
His $40 price target suggests 15% upside potential. Note that Quealy has a very strong track record on this stock. TipRanks reveals that across eight SEDG ratings he scores a whopping 100% success rate and 84% average return. Overall, SEDG has received seven buy ratings and just one hold rating in the last three months. Analysts believe (on average) the stock can spike 20% to $41.
“Strong Buy” Disruptive Stocks: Transenterix (TRXC)
Source: MilitaryHealth via Flickr
Medical device company TransEnterix Inc (NYSEAMERICAN:TRXC) specializes in what may once have seemed like a futuristic nightmare- surgical robots. Specifically, it is working on the Senhance System which gives surgeons a 3-D high-definition view and remote control of three robotic arms for laparoscopic procedures.
The stock experienced a massive boost recently following an approval from the U.S. Food and Drug Administration (FDA). The approval for its robotic device came far earlier than expected and shares doubled on Oct. 16. TRXC is now one of very few robotic devices with the required regulatory approval in the U.S. Furthermore, the potential commercial opportunity is huge with over 4 million open abdominal procedures each year in the U.S. and the EU. This opportunity will be even greater if TRXC can expand the Senhance from just laparoscopic surgery to general surgery.
From a Street perspective the stock has received three buy ratings plus one hold rating in the last three months. With the stock currently trading at just $2.22, the $4.50 average analyst price target suggests upside potential of over 100%. Stifel Nicolaus analyst Rick Wise recently reiterated his buy rating with a $4 price target.
He says TRXC’s first U.S. Senhance Surgical Robotic commercial sale to Florida Hospital Orlando is “encouraging for sure.”
“Strong Buy” Disruptive Stocks: Twilio (TWLO)
Source: Web Summit Via Flickr
Cloud communications app maker Twilio Inc (NYSE:TWLO) has had a very bad year of “meaningful underperformance.” But this hasn’t stopped Twilio’s desire to disrupt the trillion-dollar communications industry. And the company is on track to make waves with its simple software APIs and a developer-first approach.
Top Oppenheimer analyst Ittai Kidron recently attended the company’s analyst day in San Francisco. He says: “Engagement Cloud is a key element in Twilio’s strategy to disrupt and fuel the future of business-to-consumer (B2C) communications.” And the cloud has added benefits: “By delivering higher-level building blocks, Engagement Cloud can ease adoption of Twilio’s solutions, create stickier customer relationships, and drive higher value from customers.”
He concludes that Twilio remains the best-in-class Communication Platform-as-a-Service (CPaaS) vendor across several vectors, and reiterates his buy rating with a $38 price target. Seven analysts have published buy ratings on the stock in the last three months plus one hold rating. These analysts believe (on average) that Twilio can spike 57% to $39.
“Strong Buy” Disruptive Stocks: Facebook (FB)
Five-star Evercore analyst Anthony DiClemente believes Facebook, Inc. (NASDAQ:FB) can lead big tech stocks higher in 2018. Part of the reason for this is the fact that these companies remain game changers: “Today’s leading tech companies are leveraging the internet to disrupt and take profits from large established industries, a dynamic that is driving real earnings and free cash flow growth.”
He singles out FB as a prime example of this trend. Facebook has experienced massive growth over the last few years. “Between 2013 and 2017, the share of web traffic coming via Facebook has grown five-fold to exceed 40 percent” points out DiClemente. But it is Facebook’s photo sharing app Instagram that is raising eyebrows right now: “Perhaps the most striking dynamic within social media is the incredible growth of Instagram over the past three years. Based on the company’s disclosure in late September, Instagram’s user base now stands at 800 million.”
The social media giant is now looking to leverage these numbers with online video creation. Indeed, the company has already launched the Watch tab for original video content. Top Morgan Stanley analyst Brian Nowak sees Facebook making $565 million in revenue from the “Watch” tab video in 2018, on spending of $400 million. The Wall Street Journal says Facebook plans to splurge $1 billion on producing original video content.
Overall, in the last three months, the stock has received an impressive 28 buy ratings, one hold rating and one sell rating. From the current share price of $176, analysts believe (on average) that FB can still soar by 16% to hit $209.
“Strong Buy” Disruptive Stocks: Athenex (ATNX)
This innovative oncology company is developing novel cancer treatments. All eyes are on Athenex Inc’s (NASDAQ:ATNX) oral chemotherapy treatment Oraxol, which is currently undergoing Phase III clinical trials. “The very low incidence of neuropathy with Oraxol therapy may represent an advance in effective and less toxic treatment for cancer patients and is an important step towards a new chapter of oral therapy” says D Kwan, Athenex’s Chief Medical Officer.
“Outperform for oral chemotherapy disruptive potential — initiating with $35 price target” announced five-star JP Morgan analyst Kennen MacKay back in September. He believes Oraxol can achieve blockbuster sales in both breast and gastric cancer. Indeed, ATNX claims that this treatment offers “the possibility of oral therapy without infusion-related hypersensitivity-type reactions.”
Fast forward a couple of months, and MacKay’s bullish thesis is still intact. He has just reiterated his buy rating, still with a $35 price target (118% upside). This estimate is based on Oraxol launching in 2020 for breast cancer and 2021 for gastric cancer.
Which stocks are the top 25 analysts recommending right now? Find out here.
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