With the second-quarter earnings cycle all but finished there's little to move the market other than analyst sentiment. The analysts are, for the most part, still pushing the S&P 500 outlook higher which means we should expect the index to continue moving higher. Monday's analyst news from Marketbeat.com included upgrades on three names that we see as important. Not only are these stocks well positioned for revenue and earnings but with the analyst behind them, their share prices should outperform the market for the remainder of the year.
1. Duolingo Is A Hot Growth Stock
Duolingo (NASDAQ:DUOL) operates a language learning app in the United States and China. The app helps users learn 40 different languages and is gaining traction quickly. The company recently reported a strong second quarter and has received several notable upgrades because of it. The company received a Buy rating from Bank of America which views the company as the category leader and an expansion/market-share opportunity in the direct-to-consumer education market. The BoA price target of $160 compares to the consensus of $145 and recent price action near $125.
Analyst Nat Schindler:
"We are constructive on LT opportunity given category leadership in language learning and the broader direct to consumer education industry still in the earlier stages of digitization. We think Duolingo investors will look favorably at the large addressable market, differentiated & extensible platform, and strong future margin growth potential vs the 6% EBITDA margins in our 2023 model which warrant a significant premium to peer group comps."
2. Affirm Holdings Is Reaffirmed By The Market
Affirm Holdings (NASDAQ:AFRM) is a point-of-sale service for merchants and consumers that allows time-lapse payments akin to Katapult Holdings. The company received four notable price-target upgrades in the wake of some key news from Amazon.com (NASDAQ:AMZN) that means rapidly accelerating revenue for Affirm Holdings. Amazon announced that it would add Affirm’s pay-over-time features to its check-out offerings which is good news indeed.
Barclays stands out as the only analyst to upgrade the stock, from Buy to Overweight, but the consensus of the four latest shoutouts is an Overweight or Strong Buy. Their consensus price target is near $117 and compares to the broader consensus of $87 and current price action near $97.75. Share prices are up nearly 45% on the news but still offer value to shareholders. In our estimation, the new high price target of $120 matched by Truist and Morgan Stanley will soon be surpassed by new estimates from other analysts and the actual price of the stock. This is game-changing news for Affirm Holdings.
3. Crowdstrike Is A Favorite Among The Analyst
The cybersecurity stocks came into focus last week when President Joe Biden hosted a summit to discuss America's growing need for cybersecurity. That, along with an expectation for strong earnings with the second-quarter report, spurred four analysts to raise their price targets for Crowdstrike (NASDAQ:CRWD) stock. The 4 new ratings, including one upgraded rating, have a consensus of Buy/Strong Buy with a price target of $317.50 compared to the $270 currently expected by the market. With Crowdstrike expected to report earnings this week, and that report expected to be strong, we expect to see more upgrades very soon.
Shares of the stock are up more than 26% over the last month and look ready to continue moving higher. The weekly chart shows a stock in an uptrend and one that just moved up to set new highs. The indicators are bullish and suggest upward movement will continue but there is a risk. If the company's earnings report fails to impress the market, a market that has a high expectation for the results, share prices could correct back to the 150-day moving average before moving up to set fresh new all-time highs.
