Earnings Season Winners: Analyst Upgrades for COIN, SHOP and RACE
This earnings season has been an extremely optimistic time for the stock market. The Nasdaq is hitting new highs, and the strong reports are giving a much-needed boost to our economy. It has set the tone for 2024, and I believe this momentum will continue. We are finally out of the inflationary period and in a solid period of growth. Having reported impressive financials, several companies are seeing analyst upgrades and that means it is time to load up on these stocks. Based on the quarterly results and the strengthening economy, analysts have an opinion that the stocks of the below-mentioned companies will soar higher. Now is the time to make your move on these earnings season winners.
Coinbase (COIN)
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There was a lot of chatter about Coinbase (NASDAQ:COIN) before the company announced results, but its excellent financials put all doubts to rest. If you aren’t ready to take the risk of investing in crypto, betting on Coinbase can be a solid choice. One of the top earnings season winners, Coinbase crushed estimates and reported its first-ever profit of $273.4 million.
That is a significant jump from the loss of $557 million reported in the previous year. The revenue stood at $953.8 million, up 51% year-over-year (YoY), and the net income was $1.04 a share. Its transaction revenue stood at $529.3 million, and it expects a stronger 2024 with sales of $410 to $480 million.
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There is a renewed interest in cryptocurrency which led to existing users trading a higher volume. The solid results gave a boost to the stock, up 27% in the past week. It went from $140 to $180 in just five days. The market saw Coinbase as an unprofitable company and had low expectations from the results.
However, it will be interesting to see if the company can sustain the same level of profitability. As the macroeconomic conditions improve, we could see investors betting on crypto and this could help the stock soar higher. Trading at $180 today, the stock is up 190% over the last year, and more upside could be possible.
Several analysts upgraded the stock after its results. H.C. Wainwright has a price target of $250 with a Buy rating. Needham analysts raised the price target of the stock to $220 while Oppenheimer has also raised the price to $200. Further, Wedbush analyst Moshe Katri has a price target of $200, and JMP Securities upped the price target from $200 to $220 with a market Outperform rating.
Earnings Season Winners to Buy: Shopify (SHOP)
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E-commerce platform Shopify (NYSE:SHOP) has become an elite stock to own. The company reported impressive financials, and the stock is up 93% in the past year. Trading at $81 today, I expect it to hit $100 very soon.
The reason behind Shopify’s success is its easy-to-use platform. It offers a quick setup and a range of other services like marketing, website hosting and payment processing. Merchants do not want to shift to another platform because of the excellent interface and services offered by Shopify.
The company has taken several steps to cut costs including cutting its workforce and getting rid of the logistics business. This has helped it report a strong cash balance and is enjoying high liquidity right now. The company is making improvements to its business tools and has made several technical changes that improved the software.
Fundamentally, the company is in good shape with a 24% rise in sales and a 33% rise in gross profit. The gross merchandise volume saw a 23% rise, and that number is set to grow, as there is a massive market to cater to. Several analysts have upgraded the price target for Shopify after the results.
UBS (NYSE:UBS) gave it a price target of $80 with a Neutral rating while Roth MKM analyst Darren Aftahi has raised the price target to $89 with a Buy rating, and Oppenheimer analyst Ken Wong has an Outperform rating with a price target of $90. The stock has a strong upside and is a solid buy at the current level. SHOP stock moved from $91 to $81 over the past weeks, and that pullback is a strong buying opportunity.
Ferrari (RACE)
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There are several reasons Ferrari (NYSE:RACE) is racing faster in 2024. It has an upbeat outlook for the year as the demand for its cars is strong. But another reason the company is being discussed every day is Lewis Hamilton.
The Formula 1 racing legend will now be a part of the Ferrari team from next year and that is a huge win for the company. That converts into more revenue, higher sponsorship and an increase in merchandise sales.
The automaker reported impressive earnings with a record year of profits. Its net profit was $1.36 billion for the year, and the revenue was up 17% to hit $6.46 billion. The management has an even better forecast for the year and expects a revenue of over $6.9 billion. RACE stock is trading at $389 today and is up 25% in the past 6 months.
RACE is a long-term buy and hold. The company is one of its kind and caters to the ultra-luxurious segment. Inflation couldn’t affect its revenue and profit, and that shows it is here to stay for years to come. Next year could be a very important year for the company.
Driven by the results and the announcement of Lewis Hamilton joining Ferrari, several analysts have upgraded their price target for the stock. RBC Capital analyst Tom Narayan has a Buy rating for the stock with a price target of €380, JPMorgan (NYSE:JPM) has a Hold rating for the stock and UBS gave it a Buy rating with a price target of €413.00.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.
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