Top Wall Street analysts favor these stocks for potential long-term appeal

The US stock market had a solid September, thanks to the long-awaited interest rate cut by the Federal Reserve. However, escalating geopolitical tensions in the Middle East could weigh on investor sentiment this month.

However, investors may benefit from ignoring the short-term noise and following the recommendations of top Wall Street analysts to pick stocks with attractive long-term growth potential.

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.

CyberArk Software

This week’s first pick is CyberArk Software (CYBR), a cybersecurity company that focuses primarily on identity security. The company delivered better-than-expected quarterly results and raised its guidance for the full year, indicating solid demand for its products.

RBC Capital analyst Matthew Hedberg recently initiated coverage on CYBR stock with a buy rating and $328 price target, calling it a top mid-cap cybersecurity idea. The analyst believes the company is “well-positioned to consolidate identity spending and maintain sustainable and increasingly profitable growth.”

Hedberg expects CyberArk to sustain strong growth driven by demand for identity security and substantial room for growth in the core Privileged Access Management (PAM) market. Additionally, the analyst believes the company can grow beyond the PAM market by pursuing cross-selling opportunities in the Access, Secret, Endpoint Privilege Management (EPM) and machine identity markets.

Hedberg also expects the company to benefit from its acquisition of car identity specialist Venafi. He anticipates that Venafi’s growth will return to more than 20% and will be favorable to CyberArk’s growth and margins over time.

Overall, Hedberg is optimistic about further growth in CyberArk’s profitability and expects the company’s organic growth to be above 20% for several years, supported by an estimated total addressable market (TAM) of $60 billion.

Hedberg is ranked #164 out of over 9,000 analysts tracked by TipRanks. Its ratings were profitable 62% of the time, delivering an average return of 14.7%. (See CYBR Hedge Fund Activity on TipRanks)

Uber technologies

We are moving to the ride-sharing and food delivery platform Uber technologies (UBER). After hosting meetings with the company’s management, JPMorgan analyst Doug Anmuth reaffirmed a buy rating on UBER stock with a $95 price target.

Highlighting key takeaways from the meetings, Anmuth said management is confident of achieving a mid- to high-teens three-year compound annual growth rate for gross bookings, supported by a macroeconomic backdrop and stable demand from gains in the second trimester. In particular, management said demand continues to be healthy in both the mobility and delivery businesses.

Anmuth also noted the company’s optimism about expanding its Uber Eats and grocery advertising business. In particular, the advertising business has a run rate of $1 billion (as of Q2) or about 1% of gross delivery bookings. In fact, shipping profits have improved in recent quarters due to the high-margin advertising business. Uber expects its food ad business to represent 5% of gross bookings over time.

The analyst also highlighted the company’s growing interest in autonomous vehicles (AVs). “Uber can add value to AV technology providers by driving demand/usage and building the AV ecosystem through fleet operations,” Anmuth said, based on discussions with management.

Anmuth is ranked #93 out of over 9,000 analysts tracked by TipRanks. Its ratings were profitable 62% of the time, delivering an average return of 18.4%. (See UBER Stock Buybacks on TipRanks)

Meta platforms

This week’s third stock pick is a social media company Meta platforms (THE TARGET). At the recent Meta Connect event, the company highlighted the Quest 3S, its latest virtual reality headset, as well as other innovations, including its latest augmented reality (AR) smart glasses prototype (Orion) and Meta AI’s new features. chatbot.

Following the announcements at the event, Baird analyst Colin Sebastian reaffirmed a buy rating on Meta shares and raised his price target to $605 from $530.

The analyst attributed the higher price target to a number of factors, including significant opportunities to expand core monetization with artificial intelligence (AI)/generative AI features and continued momentum in messaging. Its improved outlook also reflects “generally positive social media ad reviews,” with September looking better than trends seen in August.

The analyst raised its 2025 revenue and 2024 and 2025 EPS estimates to reflect stable macro trends, higher contributions from messaging and device and AI platform improvements. However, he slightly lowered his operating margin estimate for 2025 to reflect increased network and depreciation expenses.

Commenting on Meta Connect, Sebastian said he believes this year’s event reflects the significant progress the company has made with its Reality Labs and AI/Generative AI division. Specifically, the analyst believes that the Llama update gives Meta’s LLMs (large language models) an additional advantage over close rivals such as Anthropic’s Claude, OpenAI’s ChatGPT, and Google’s Gemini. It is also optimistic about the innovations related to the Meta AI assistant and expects it to be the most popular AI assistant by the end of 2024.

Sebastian is ranked #277 out of over 9,000 analysts tracked by TipRanks. Its ratings were profitable 57% of the time, delivering an average return of 13.6%. (See META Insider Trading Activity on TipRanks)