Generally, Wall Street stock price predictions are hardly the best source of investing ideas that have the most upside. Investors should interpret stocks that analysts claim have the most upside carefully.
Often, either the analyst is too optimistic about the company’s fair value or the stock market is wrong. Investors may pick stocks with the most promising price predictions by reviewing their stock scores.
As difficult as it is to make stock price predictions based on the numbers alone, sometimes those numbers indicate a definite price discrepancy. In what follows, we’ll take a look at stock price predictions for companies that seem preternaturally correct.
| APP | AppLovin | $34.46 |
| BHC | Bausch Health | $6.20 |
| APPS | Digital Turbine | $22.91 |
| FTCH | Farfetch | $9.90 |
| NTLA | Intellia Therapeutics | $65.60 |
| SE | Sea | $88.58 |
| WBD | Warner Bros. Discovery | $13.68 |
AppLovin (APP)
AppLovin (NASDAQ:APP) acquired MoPub. In the last quarter, it completed migrating it into its MAX platform. This unifies the two wireless mediation solutions in the mobile app market.
AppLovin needed a quick integration of MoPub, otherwise the publishers would have risked losing their advertising revenue. As a large marketplace in app advertising, publishers will realize the strategic long-term value.
AppLovin thrives when the game studio business is healthy. The combination of the Max and MoPub marketplace will increase AppLovin’s scale. In the connected television space, the company will focus on expanding its software. It intends to add its machine learning software in more places. The growth in its addressable market will lead to higher revenue potential.
In the last quarter, AppLovin reported revenue growing by 3.6% year over year to $625.4 million. For the full year of 2022, it expects revenue in the range of $3.14 to $3.44 billion. Its software platform revenue will be in the range of $1.14 billion to $1.29 billion.
Bausch Health Companies (BHC)
Bausch Health (NYSE:BHC) lost half its value on July 28, when a judge ruled against it in a patent infringement suit.
Some investors may have anticipated the ruling ahead of time. BHC stock has traded in a steady downtrend for the last 12 months.
In the first quarter, BHC posted revenue of $1.918 billion. It reported a GAAP net loss of $69 million, while adjusted EBITDA was $732 million. Despite the poor results, analysts have an average price target of $18.67. The stock traded as low as $4.00 before bouncing back slightly.
BHC stock is high-risk speculation. The company’s debt situation is still lingering. It ended the first quarter with $23.4 billion in net debt. Its initial public offering of Bausch + Lomb (NYSE:BHC) contributed to its debt reduction of $3.4 billion since the quarter’s end.
Digital Turbine (APPS)
Digital Turbine (NASDAQ:APPS) is an advertising technology firm. In the fourth quarter, it earned 35 cents a share in the fiscal 2022 year after revenue increased by 138% year over year to $747.6 million.
The company is relying on SingleTap licensing to accelerate its growth. Investors need to wait for Digital Turbine to add more partners. It already has large tier 1 players who support it. Once partners like Samsung, Cricket, and Tracfone complete the trial phase, Digital Turbine will start generating some revenue.
The macroeconomic environment continues to weaken rapidly. High levels of inflation, rising interest rates, and weakening consumer confidence might hurt the ad market. APPS stock peaked at $93.98 in the last year. It traded as low as $14.43 to reflect the anticipated slowdown.
Analysts have a $48.00 average price target on this stock. According to Tipranks, Roth Capital is the most recent analyst recommending APPS stock. Analyst Darran Aftahi assigned a $36 price target and a “buy” rating.
Farfetch (FTCH)
Farfetch (NYSE:FTCH) is a British-Portuguese online luxury fashion retail platform. Demand for luxury products typically weakens significantly during a downturn.
The average price target is nearly $18, making the stock price predictions on FTCH pretty enticing.
Despite its poor value, the online retailer is an attractive takeover target. Another luxury goods firm with plenty of cash seeking growth may buy Farfetch. In November 2021, Richemont and Farfetch discussed a partnership. The discussion included Farfetch investing directly in Yoox Net-a-Porter.
In return, Yoox Net-a-Porter would leverage Farfetch’s platform. This would enable it to pivot to a hybrid 1P/3P business model.
If acquired, Richemont would need to cut Farfetch’s overhead costs. As an unprofitable firm, Farfetch will not command a premium. In the first quarter, Farfetch posted revenue growing by only 6.1% year over year to $514.8 million.
In Q1/2022, its adjusted EBITDA was negative $35.8 million. It lost 24 cents a share (non-GAAP) partly due to suspending operations in Russia. China’s lockdown as a result of the Covid-19 outbreaks also hurt its revenue.
Intellia Therapeutics (NTLA)
Intellia Therapeutics (NASDAQ:NTLA) fell after posting a $1.33 negative EPS. The firm has strong prospects with Apollo-B, which treats amyloidosis.
Intellia’s treatment will reduce the protein to low levels. The positive data on NTLA-2001 is a milestone. Investors should expect positive news from its ongoing Phase 1 study.
Intellia’s NTLA-2002 is an investigational therapy for the treatment of hereditary angioedema (HAE). The treatment targets the KLKB1 gene in the liver. It permanently lowers plasma kallikrein and the related activity.
NTLA-5001 is Intellia’s cell therapy for treating acute myeloid leukemia. The firm announced its first dosing on March 1. In this in vivo study, Intellia is reviewing the treatment’s efficacy and safety readout. It is studying the allogenic approach.
The company’s autologous approach to developing cell therapies costly and takes time. It cannot manufacture treatments for 50 or more people at one time. In the future, it might get there. That would introduce efficiency and would lower the cost of goods.
Sea (SE)
Sea (NYSE:SE) is a tech mobile game developer in Singapore. In the first quarter, Sea posted a loss of 80 cents a share. Revenue grew by 64.4% year over year to $2.9 billion. It benefited from $1.5 billion in revenue from its e-commerce unit.
GAAP marketplace revenue was 7.2% of the gross merchandise value. Sea said that transaction-based fees and advertising income accelerated. This has a higher profit margin compared to its revenue from other value-added services.
It lost $509.9 million in total adjusted EBITDA. Still, CEO Forrest Li said that Shoppee will generate positive adjusted EBITDA by the end of next year in Southeast Asia and Taiwan.
Sea will deepen user engagement on its gaming platform. It will be adding developments in its game to achieve long-term platform revenue sustainability. For example, Free Fire will have healthy longevity when Sea introduces more diversified content and game modes. In addition, gamers will have user-generated content tools.
Warner Bros. Discovery (WBD)
Warner Bros. Discovery (NASDAQ:WBD) lost 16.6% on August 5, 2022, after posting second-quarter results. In the second quarter, WBD posted a GAAP EPS of -$1.50. Revenue rose by 221.2% year over year to $9.83 billion.
The company bundled several write-downs. Amortization of intangibles costs $2.004 billion. Restructuring and other charges added to $1.033 billion in losses. And transaction and integration expenses related to separating from AT&T (NYSE:T) were $983 million.
WBD has an urgency to cut costs. Its net leverage is 5.0 times. Its gross debt of $53.0 billion could cost more to service in the future. The firm will have repaid $6 billion in debt by the end of August 2022.
It implemented cost initiatives that save it $1 billion in run rate synergy over the next 12 months. Furthermore, it will have at least another $2 billion saved in its cost synergy plan.
Importantly, WBD has long-term debt financing. The average maturity is over 14 years. The average interest rate is 4.3%. Most debt is at a fixed rate. The Federal Reserve’s aggressive interest rate hikes will not have an impact on WBD’s interest on the debt.
On the date of publication, Chris Lau did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.