We are in the stock market to generate a profitable return; there’s no other reason to invest in anything, really. This makes the first point every investor must consider, the most important question in stock investing, quite simple: Will this stock grow and produce a return?
This is a situation intended for data analysis, and the Smart Score. The Smart Score is a sophisticated data collection and collation tool, based on an AI algorithm, that scours the markets, gathers data on thousands of publicly traded stocks and measures it, for each stock, according to a set of factors that have been shown to be correlated with future outperformance. The result is a single-digit score, on a scale of 1 to 10, indicating the likely short-term future of the stock.
Now link that to analyst calls, recommendations from experienced stock professionals who have built their reputations by analyzing and interpreting stock market trends and patterns. When the analyst calls and the Smart Score matches, there is a clear sign for investors that this stock deserves further consideration.
We got a head start on this, using the TipRanks database to find two stocks that feature a smart “Perfect 10” score and recent “Buy” ratings from analysts. And here we’ll add a third element to the mix – a monster growth story so far this year, but the kind that analysts say has yet to run its course. Here’s a closer look at the data, Smart Score, and analyst reviews.
Arlo Technologies, Inc. (ARLO)
First on our list today is Arlo Technologies, a technology company that brings together wireless connectivity, smart home apps, and home security to provide its service subscribers with a range of easy-to-use, integrated home security system options. use. The Arlo product line includes wireless cameras, audio and visual doorbells, floodlights and a smart device app that allows the homeowner to access information and visibility from anywhere with a cellular or Wi-Fi connection. -Fi. Additionally, the AI-powered subscription service provides personalized notifications and emergency services to optimize security and response times when they are needed most.
Arlo boasts that its products protect more than 6 million families, and in the first quarter of this year, the company announced that it had reached the milestone of 2 million paid subscribers. Year-over-year, the company’s paid accounts grew by more than 60%.
Elsewhere in the quarter, revenue was $111 million. It was down 11% year over year, but it was more than $6 million better than expected. Net profit, EPS of 1 cent per share by non-GAAP measures, was profitable after two quarters of negative EPS – and was 6 cents per share above guidance.
Arlo had $9 million in free cash flow in the first quarter and ended the quarter with $118.7 million in free cash and cash equivalents. Looking ahead, the company expects second quarter revenue to be between $105 million and $115 million, consistent with first quarter results.
Investors were pleased with the company’s quarterly release, and ARLO shares jumped more than 30% following first-quarter results. In fact, investors have supported this stock all year; shares are up 208% since the start of 2023.
When it comes to the Smart Score, we see that Arlo’s “Perfect 10” is based primarily on three of the factors: Crowd Wisdom, which was very positive, reflecting a 20.5% increase in individual holdings of ARLO in the past 30 days; blogger sentiment, which is 88% positive in recent coverage; and an increasingly positive stance from hedges tracked by TipRanks, which increased their holdings by 1.6 million shares in the last quarter.
Finally, 5-star analyst Anthony Stoss of Craig-Hallum believes Arlo is on track to meet its subscription goals and has strong growth potential for investors. As he sums up the company’s position, “ARLO just passed the 2 million paying subscriber mark, and we believe they will continue to grow subscribers towards their goal of 10 million. ARLO has multiplied the number of its recurring paid subscriptions in just three years by 7. ARLO is currently trading at 1.5x EV/2023E sales, but we believe that as the business becomes more SaaS-dominated, it can gain a higher overall multiple… While the stock has performed well over the past three months, we think it’s still early days for this relatively unknown SaaS game.
Along with those comments, Stoss is giving Arlo stock a Buy rating, and its price target of $17 implies a 57% upside over the next 12 months. (To see Stoss’ track record, Click here.)
The analyst consensus on Arlo is a strong unanimous buy, based on 3 recent positive reviews. The shares are priced at $10.82 and the mid-price target of $13.33 suggests 23% year-over-year upside potential. (See Arlo’s inventory forecast.)
Therapeutic Black Diamond (BDTX)
Next up is Black Diamond Therapeutics, an early-stage biopharmaceutical company working on the discovery and development of new precision drugs in the field of oncology. The company focuses its research on cancers of genetic origin that have high unmet medical needs and limited current treatment options.
Black Diamond’s work targets unmedicated mutations in genetically defined cancers, and its proprietary platform is based on an in-depth understanding of several factors: cancer genetics, onco-protein function and drug discovery. The use of genetic sequencing technology has revealed many untreated genetic mutations and new families of oncogenic targets have been identified, providing Black Diamond with a vast field of research.
The company was hit hard in April last year, when it halted research into drug candidate BDTX-189 and cut its workforce by 30% at the same time. Currently, most of Black Diamond’s research leads are in the preclinical stage, but the company has returned to the clinic in recent months, with one lead advancing to Phase 1 clinical trials.
This drug candidate, BDTX-1535, is described as a MasterKey investigational fourth-generation epidermal growth factor receptor (EGFR) inhibitor and is being developed for the treatment of non-small cell lung cancer (NSCLC) and glioblastoma multiforme (GBM). Last month, Black Diamond announced positive Phase 1 initial dose escalation data, with the drug showing anti-tumor activity. Shares of BDTX jumped 235% after the data was released, with the stock now up 169% this year.
This company found support for its Perfect Smart Score from two of the same factors as ARLO above. Black Diamond gets 100% positive coverage from financial bloggers, who are usually quite fickle, and individual investors agree too – the wisdom of the crowd is 74.4% positive over the past 30 days. Additionally, corporate insiders have purchased over 24 million shares of BDTX in the past 3 months.
This biotech caught the eye of Stifel Nicolaus analyst Bradley Canino, who notes the potential of BDTX-1535 in the current market. “Compared to new developments that have modest monotherapy efficacy in 2L post-Tagrisso, and are constrained to combinations or long randomized trials, the BDTX-1535 effect size may potentially enable rapid regulatory pathways in monotherapy “, explained Canino. “Our initial concern about the sustainability of the response persists, but the company now appears funded in the 2024 dose expansion data to provide such a response. We see a positive risk/reward in this data which can clarify the regulatory pathway and market opportunities, with a significant upside over our conservative model estimates if approximate replication of Phase 1 data is achieved…”
Canino sees a lot of growth potential here even after the recent massive surge; he rates the stock as a buy, with a price target of $10 indicating his confidence in a solid 106% upside for the year ahead. (To see Canino’s track record, Click here.)
This is another stock with a unanimous Strong Buy consensus rating, this one based on 5 positive analyst reviews established in recent weeks. The shares are trading at $4.85 and their average price target of $11.60 is even more bullish than Canino would allow, implying a 139% gain on the one-year horizon. (See Black Diamond’s stock forecast.)
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Disclaimer: The opinions expressed in this article are solely those of the analysts featured. The Content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.