Top Street analysts are optimistic about the potential of these 3 stocks

July’s consumer price index reading indicated a slowdown in inflation, and July retail sales addressed investor fears of an economic slowdown. They also raised hopes of an interest rate cut at the Federal Reserve’s next meeting in September.

Amid improving market sentiment, investors looking for good stocks can rely on top Wall Street analysts to suggest stocks with attractive long-term growth potential. Top analysts make recommendations after conducting an in-depth analysis of a company’s financial situation, competitive context and future prospects.

With that in mind, here are three stocks favored by the street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.

monday.com

This week’s first pick is project management software vendor Monday.com (MNDY). The company impressed investors with its second-quarter results and raised its full-year outlook on strong demand from large customers. Notably, the number of paying customers with more than $100,000 in annual recurring revenue (ARR) increased by 49% to 1,009.

In reaction to the robust results, TD Cowen analyst Derrick Wood raised his firm’s price target on MNDY to $300 from $275 and reiterated a buy rating, calling the stock a top pick. The analyst pointed to strong demand for Monday.com’s products among high-paying customers, with the company winning its largest-ever deal with a multinational healthcare company.

“We see this as evidence that MNDY is successfully moving into the market and becoming more of a platform sale, and we believe this is an early sign of larger deals to come,” Wood said of the deal.

The analyst also noted that Monday.com expects the net dollar retention rate (NDR) to remain stable at around 110% through fiscal 2024, with management projecting modest growth through the end of the year.

“We see luxury traction, new product adoption and pricing tailwinds as strong growth drivers for continued execution in 2H,” Wood said.

Wood is ranked #197 out of over 8,900 analysts tracked by TipRanks. His evaluations were successful 60% of the time, each delivering an average return of 13.3%. (See MNDY Hedge Fund Trading Activity on TipRanks)

CyberArk Software

Another favorite tech company is CyberArk Software (CYBR). The identity security company posted upbeat results in the second quarter and raised its full-year outlook, citing sustained demand for its platform.

Following the Q2 print, Baird analyst Shrenik Kothari reaffirmed a buy rating on CYBR stock and raised his price target to $315 from $295. The analyst believes Q2’s strong NNARR (net new annual recurring revenue), strong new acquisitions and business expansion among existing customers were driven by CYBR’s unified identity security platform.

Kothari noted that CYBR’s workforce identity and machine identity solutions are emerging as major growth catalysts. He believes the stock’s premium valuation to peers is justified given “the shift to recurring revenue and CYBR’s position as a market leader.”

Despite macroeconomic challenges, the analyst is optimistic about demand for CyberArk’s identity security solutions due to an evolving threat landscape. He added that the company’s robust profitability and free cash flow indicate its ability to capitalize on customers’ identity security needs.

The analyst pointed out that management is positive about the pending acquisition of Vanafi, which is expected to enhance CyberArk. position in the car identity security market.

Kothari is ranked #196 out of over 8,900 analysts tracked by TipRanks. Its ratings were profitable 72% of the time, each offering an average return of 22.7%. (See CYBR Stock Charts on TipRanks)

T-Mobile US, Inc.

Finally, the third stock pick of the week is wireless network provider T-Mobile US (TMUS). The company recently reported better-than-expected second-quarter results and raised its full-year guidance for net customer additions and postpaid cash flow.

On August 12, Tigress Financial Partners analyst Ivan Feinseth reiterated a buy rating on TMUS stock and raised his price target by 15% to $235 from $205. T-Mobile US continues to outperform the industry in terms of customer additions and service revenue growth, supported by “the best ultra-capacity high-speed 5G network in the industry,” Feinseth said.

T-Mobile’s high-speed network and expanded 5G availability are driving subscriber growth and generating higher revenue and cash flow, the analyst added. Highlighting TMUS’s vast footprint, Feinseth said the company’s 5G network reaches 98 percent of Americans, while its ultra-capacity 5G network covers more than 330 million people. He expects the company to benefit from opportunities in fixed wireless access (FWA).

In addition, Feineth is encouraged by T-Mobile’s shareholder returns. In Q2 2024, TMUS returned $3 billion to shareholders through dividends of $759 million and share repurchases of $2.3 billion.

Feinseth is ranked #239 out of over 8,900 analysts tracked by TipRanks. Its ratings were profitable 60% of the time, each offering an average return of 11.9%. (See TMUS Stock Buybacks on TipRanks)