Clouds are gathering on the global economic horizon. In a clear sign that the good times of easy money are well and truly over, last week three major central banks – the US Federal Reserve, the Bank of England and the Swiss National Bank – all enacted rate hikes. ‘interest. For the Federal Reserve, it was a 0.75% hike, the biggest increase since 1994, in response to news that the year-over-year inflation rate had peaked. 8.6% for more than 40 years.
So how can investors overcome this hostile environment?
A simple answer is to turn to the experts. Major investment banks employ professional and experienced stock analyst executives, who scour the markets for broader patterns and also look for individual stocks that will stand out.
This is exactly what Goldman Sachs, the Wall Street giant, made its body of analysts do. They highlighted stocks that are expected to post sizable gains going forward, even if the general market expectation declines. We used the TipRanks database to sift through some of Goldman’s picks and found 3 that the company says will deliver over 40% returns in the coming year. Here are the details, along with Goldman’s commentary.
Global-e Online (GLBE)
The first Goldman pick we’ll look at is Global-e Online, an international e-commerce technology company. Global-e operates an online platform that facilitates direct-to-consumer online trading in cross-border markets. The platform enables merchants to bridge tax and customs differences between sellers and buyers, and enables retailers to streamline online shopping for their international customers in over 200 local markets, adapting to differences in languages, currencies, shipping and regulatory authorities. The company works with corporate clients in the US, European and Asian markets.
Global-e made good use of last year’s bull market. In May 2021, Global-e raised $431 million in its IPO. The stock closed its first day of trading at $25.50 and has seen volatility since then, peaking at $81 in September and dropping 70% this year alone.
In terms of financial performance, Global-e had a tough 1Q22. The company’s EPS, with a loss of 35 cents per diluted share, was more than 4 times higher than the loss of 8 cents a year ago. Revenue was better at $76.3 million, up 65% year-over-year. The company’s gross merchandise value (GMV), a measure of what Global-e collects from merchants and buyers for each transaction, rose 71% year-over-year in the first quarter, to $455 million.
So while profits are down, business is up. Goldman analyst Will Nance takes note of this in his review of the stock, writing: “While the macro environment remains highly uncertain, the company believes its low double-digit EBITDA margins, cash flow positive free cash flow, its efficient customer acquisition model and strong secular tailwinds are likely to support continued growth and investment in the business, although we see a slowdown in broader spending trends in 2H22. “
“In addition, the company noted that its ongoing geographic expansion and diversification, its exclusive strategic partnership with Shopify, and the continued merchant demand the company has seen should continue to drive strong growth in the years to come,” said added Nancy.
To that end, Nance believes Global-e’s potential warrants a Buy rating, and its price target of $28 suggests a 43% year-over-year upside. (To see Nance’s prize list, Click here)
Goldman’s point of view is not outlandish about this e-commerce company. The 9 recent analyzes by GLBE analysts are all unanimous, as buys, for a consensus rating of strong buy. The stock is selling for $19.57 and its mid-price target of $29.89 is even more bullish than Goldman Sachs allows, implying about a 53% upside over the next 12 months. (See GLBE stock forecast on TipRanks)
Innoviz Technologies (INVZ)
Next, Innoviz produces LiDAR systems, an advanced sensor system used in GPS and airborne mapping, surveying and surveying, but which also has applications in navigation and autonomous vehicles. LiDAR systems use advanced laser technology (the acronym stands for “light detection and ranging”) to act like the eyes of self-driving cars and, along with high-end AI computing, are part of the essential technology that will make autonomous vehicles a reality.
Innoviz currently has two LiDAR hardware systems, the first generation InnovizOne and the second generation InnovizTwo. These products have been tested and used in a range of applications and driving conditions, including robotaxis, curb delivery technology, industrial drones and consumer vehicles, as well as heavy duty trucks, industrial equipment and commercial drones. Both systems are compatible with Level 3 to 5 autonomous vehicles. Innoviz’s LiDAR systems can be supplemented with the company’s Perceptions software package.
The company’s next major product, the “next generation” Innoviz360, is in final development for automotive and non-automotive applications. Its commercialization is planned for the fourth quarter of this year.
In May of this year, Innoviz made a major announcement: having entered into an agreement with one of the world’s largest automotive groups for the manufacture of LiDAR systems. The deal increased Innoviz’s projected backlog by approximately $4 billion to a new total of over $6.5 billion. The name of the automotive partner has not been disclosed, although Innoviz is currently working with BMW on mass production of LiDAR for Level 3-5 autonomous vehicles, making it the first LiDAR company to partner with. a major automaker in the field.
Innoviz is still in the early stages of commercializing its products. The InnovizOne system is showing sales growth and the company expects to see its first InnovizTwo sales later this year. Incomes, although low, are increasing; 1Q22 revenue of $1.8 million was more than double the prior year’s figure of $0.7 million.
Analyst Mark Delaney covers this stock for Goldman, and he sees a clear path based on the company’s recent contract announcements and its solid base in the niche.
“Innoviz has seen strong engagement momentum since winning the mass production program with a leading global OEM as a Tier 1 supplier…We continue to believe that its most recent win underscores its strong position in the market as it now has 3 rounds of production gains contributing to a prospective backlog of $6.6 billion (significantly higher than other lidar vendors in the space, although we note that ‘there is some degree of estimation involved in calculating a backlog),’ Delaney wrote.
“While the recently announced Tier 1 win represents a significant long-term revenue opportunity, in the medium term, Innoviz believes it can generate significant revenue in 2023 from its two previously announced series wins (with BMW and a autonomous shuttle program L4), as well as non-automotive end markets,” the analyst added.
Consistent with this outlook, Delaney is pricing INVZ shares long, and his $7 price target implies around 69% one-year upside potential. (To see Delaney’s track record, Click here)
Overall, Innoviz shares are getting a unanimous boost, with 3 buys supporting the stock’s consensus strong buy rating. The shares are selling for $4.13 and the mid-price target of $8 suggests around 94% upside potential. (See INVZ stock forecast on TipRanks)
Adobe, Inc. (ADBE)
Let’s finish with one of the best-known names in software, Adobe. This company has achieved two of the main goals of any business: a strong product line with a strong customer base and a strong brand image to back it up. Adobe is known as the developer of the PDF format, as well as products such as Photoshop, Illustrator and InDesign, which are now available as SaaS offerings through the proprietary Creative Cloud.
On top of that, Adobe reported strong revenue and profit. In its second quarter for fiscal 2022, which ended June 3, the company posted record revenue of $4.39 billion, up 14% year-over-year. ‘other. Non-GAAP EPS of $3.35 was slightly higher than the forecast of $3.31, and the company’s operating cash flow reached $2.04 billion. This is a solid performance from a company that has a history of strong quarterly reports.
In its updated guidance, however, management cut its 2022 revenue and EPS guidance. Adobe previously released full-year guidance of $13.70 EPS and $17.9 billion turnover; which has been reduced in this report to $13.50 EPS and $17.65 income. The reduction spooked investors, at least temporarily.
Covering Adobe for Goldman Sachs, 5-star analyst Kash Rangan wasn’t too fazed by the discounted advice. He believes Adobe will continue to deliver the goods over the long term and wrote, “Despite additional headwinds in the FX market, we continue to believe in the strength of the underlying business, which is showing strong demand and a resilient operating model. We believe Adobe is on track to double the number of towers in LT, potentially entering the top ranks of software companies to reach over $40 billion in revenue. »
Rangan didn’t just write an optimistic outlook; he backed it up with a Buy rating and price target of $540 that showed his confidence in a 48% upside for the coming year. (To see Rangan’s track record, Click here)
Tech giants like Adobe have no trouble catching analyst reviews – and there are 25 such reviews on record for ADBE stock. They are broken down into 20 buys and 5 takes, for a strong buy consensus. The stock is currently trading at $365.33 and has an average price target of $472.58, suggesting a potential one-year gain of around 30%. (See Adobe stock predictions on TipRanks)
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Disclaimer: The views 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.