Stocks like Peloton, Plug Power and Rivian are long-term winners


A Peloton exercise bike is seen after the ringing of the opening bell for the company’s IPO on the Nasdaq Marketplace in New York City, New York, U.S., September 26, 2019.

Shannon Stapleton | Reuters

Inflationary pressures, supply chain issues and a resurgence of Covid are weighing on companies and rocking stocks.

The latest selling episode suggests that many investors prefer to take losses and get their money out as soon as possible.

However, Wall Street’s top pros are telling investors that the current market turmoil is opportunity in disguise for those with a long-term perspective. Experts have picked their favorite stocks to buy now, according to TipRanks, which ranks Wall Street’s top performing professionals.

Here are five stocks that top analysts say present a bargain opportunity.

RingCentral

Center Ring (RNG) is a provider of cloud-based business communications solutions for customers across all industries. The company reported a strong first quarter of 2022, with revenue and adjusted earnings per share not only improving over the prior year quarter, but also beating the consensus estimate. The company then released an upbeat outlook for the second quarter.

Despite its strong results and optimistic outlook, RingCentral was not immune to the selloff that hit stocks across the board. For investors who might be considering buying the dip, Oppenheimer’s Timothy Horan urges them to go ahead. In a recent report, the analyst said RingCentral’s high-quality service allows it to keep prices stable across its various offerings. The analyst also appreciates the company’s renewed focus on profitability. (See RingCentral website hits on TipRanks.)

Horan priced the stock as a buy with a price target of $100.

RingCentral CEO Vlad Shmunis said the company’s success is based on three factors: trust, innovation and partnership. The company recently launched several new products, including those targeting small businesses, hybrid work and study segments.

RingCentral has partnered with telecom giants like AT&T (J), Verizon (VZ), Vodafone (VOD) and Deutsche Telekom (DTEGY). It also recently added Frontier (FYBR) as a partner, as it seeks to reach more small businesses. According to Horan, RingCentral has the best go-to-market strategy, citing its partner network of many legacy telecom providers and PBXs.

The analyst expects RingCentral to be a major beneficiary of the rapidly expanding cloud communications market, which he predicts will quadruple over the next six years to $100 billion.

Of the roughly 8,000 analysts in the TipRanks database, Horan is ranked 200th. The analyst was correct 64% of the time in his stock ratings, with an average return of 12.8%.

Interactive Platoon

Interactive Platoon (PTON) released a recent quarterly report that showed declining revenue and a growing loss. The fitness company’s business has not been at its best amid high inflation and global supply chain disruptions. The market crash also took its toll on Peloton shares.

However, Jonathan Komp of Baird thinks it would be wrong to write off Peloton due to his current issues. In a recent report, the analyst noted that new Peloton CEO Barry McCarthy is pursuing multiple growth opportunities and working on operational improvements. The analyst also believes that Peloton’s high-margin, fast-growing subscription business appears undervalued.

Komp priced the stock as a buy with a price target of $25.

“We are optimistic that industry demand is near/at a new benchmark and that PTON can generate healthy profitability by F2024E,” the analyst said. Komp believes the subscription business will support Peloton’s profitability. He noted management’s cost control efforts, citing Peloton’s annual cost savings target of $800 million by fiscal year 2024. (See Peloton’s stock charts on TipRanks)

Komp is ranked 473rd out of nearly 8,000 analysts in the TipRanks database. The analyst’s stock ratings were accurate 51% of the time, with an average return of 14.1% per rating.

Rivian Automotive

Rivian Automotive (SHORE) is a new electric vehicle manufacturer, and it has built several models, namely the R1T pickup truck, the R1S SUV, and the EDV delivery van. Shares of the company slipped amid the market tumult.

While some may see a knife drop at Rivian, Mizuho’s Vijay Rakesh is urging investors to buy the dip. In a recent report, the analyst pointed out that Rivian’s business actually looks better than many investors realize.

Rakesh priced the stock as a buy with a price target of $80.

Rivian aims to produce 25,000 vehicles in 2022. The company produced 2,553 vehicles in the first quarter of 2022. It is increasing its manufacturing capacity to meet its production target amid strong demand for its vehicles. Rivian has now received over 90,000 pre-orders for its truck and SUV models, compared to around 83,000 pre-orders in the previous update. Rakesh noted that Rivian’s nearly 10,000 new pre-orders have a higher average sale price of $90,000 per vehicle, compared to $77,000 for previous orders. (See Rivian Retail Investors on TipRanks)

Adding to his bullish assumption, the analyst noted that Amazon (AMZN) has placed an order with Rivian for 100,000 vans, which are expected to be delivered by 2030. With orders continuing to come in, demand is not a problem for Rivian, the company just needs to increase the production. According to Rakesh, Rivian has enough cash to last for the next 11 quarters.

Of the roughly 8,000 analysts in the TipRanks database, Rakesh is ranked 72nd. Analyst calls were accurate 62% of the time, with an average return of 23.2% per rating.

six flags

Six flags (SIX) operates regional theme parks and recently reported a generally strong first quarter. However, the stock continued to trade well below its recent highs alongside the broader market. In a recent report, Eric Wold of B. Riley Financial explained how Six Flags’ business will improve in the future.

Wold priced the stock as a buy with a price target of $55.

Investors have long focused on the attendance numbers of theme park operators. However, Wold said attendance is no longer a key metric when it comes to evaluating Six Flags. According to the analyst, Six Flags is focusing on attracting premium guests while cutting programs that have traditionally attracted low-margin guests. This means that while attendance may decline, Six Flags should see an improvement in profitability, the analyst said. (See SIX Flags risk factors on TipRanks)

The analyst also believes that Six Flags has the ability to offset inflationary pressures. For example, a new pricing strategy that raises admission fees and efficient staffing should help alleviate inflation and salary pressures.

Of the roughly 8,000 analysts in the TipRanks database, Wold is ranked No. 701. The analyst’s calls were right 46% of the time, with an average return of 10.9% per rating.

Plug hole

The fuel cell company Plug Power (PLUG) recently reported that sales nearly doubled year-over-year in the first quarter, but high costs led to a bigger loss. Lately, the PLUG stock has been under pressure, registering a steep decline from its recent high. (See Plug Power Blogger Sentiment on TipRanks)

According to HC Wainwright’s Amit Dayal, Plug Power’s stock drop is a blessing in disguise. The analyst sees the company’s business improving in the coming years and the stock rising as well.

Dayal priced the stock as a buy with a price target of $78.

Plug Power is expanding its operations globally and the analyst estimates that up to 25% of the company’s estimated $909 million revenue in 2022 will come from international markets. Volatile natural gas prices have put pressure on Plug Power’s fuel margins, and Dayal acknowledges that it could remain so in the near term. However, the company is improving its service margins.

“We believe the stock should get better market appreciation on evidence of execution versus improving margins and global growth,” Dayal said.

Plug Power’s fuel cell solutions meet clean and renewable energy needs. According to the analyst, the stock should benefit from US and global climate change legislation.

Dayal is ranked 28th out of nearly 8,000 analysts in the TipRanks database. Analyst ratings were correct 44% of the time, with an average return of 49.8% per rating.


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