Wells Fargo added Healthequity Inc (NASDAQ:HQY), Cable ONE (NYSE:CABO), and Vizio Holding Corp (NYSE:VZIO) to its Q3/23 Tactical Ideas List.
Wells Fargo expects HealthEquity to outperform in the next 12 months due to low valuation multiples and anticipated growth in 2025 consensus estimates. The introduction of new products further strengthens the growth potential.
The bank predicts that HealthEquity will continue to exceed expectations in its Q2/24 earnings (scheduled in September) and cited factors such as long history of conservative guidance, operational efficiencies, and exposure to rising overnight rates as contributors to potential guidance raises over the coming quarters.
Wells Fargo expects Cable ONE to face elevated competitive pressure for subs, potentially impacting earnings growth. According to the firm, the second quarter (Q2/23 scheduled in August) tends to be challenging for net additions for broadband due to school-related disconnects, further heightening the risk for the company in that period.
Wells Fargo believes VIZIO has the best potential in CTV growth as it is under-monetized vs peers. “The CTV scatter market is showing some green shoots. As Platform+ scales to maturity, we expect strong top and bottom-line growth,” added the firm.