In this article, we discuss 3 stocks that analysts say will double. If you want to see more stocks that analysts are monitoring, check out Analysts Say These 5 Stocks Will Double.
3. Coinbase Global, Inc. (NASDAQ:COIN)
Number of Hedge Fund Holders: 46
Coinbase Global, Inc. (NASDAQ:COIN) is an American financial infrastructure and technology company that supports the global crypto economy. The stock has declined more than 77% year to date as of July 7, which is caused by the crypto winter. The crashing crypto market has yet to faze Wall Street completely, as many analysts remain bullish on the long-term prospects of Coinbase Global, Inc. (NASDAQ:COIN) and expect the stock to double, according to Bloomberg.
While some analysts still consider Coinbase Global, Inc. (NASDAQ:COIN) a bargain buy, Atlantic Equities analyst Simon Clinch on July 7 downgraded the company to Neutral from Overweight, lowering the price target to $54 from $95. The analyst stated that his “materially” slashed target was due to mounting concerns for the company and the crypto universe in the short and intermediate term. He worries about Coinbase Global, Inc. (NASDAQ:COIN)’s capacity to scout and retain talent, as well as the misinformation going around about the company’s financial strength and consumer asset protections. His hopes for stability in crypto prices and volumes has “dashed” and he expects a severe crypto winter. He has incorporated the lower expectations in his base case, the analyst told investors.
According to Insider Monkey’s Q1 data, 46 hedge funds were long Coinbase Global, Inc. (NASDAQ:COIN), down from 57 funds in the earlier quarter. Cathie Wood’s ARK Investment Management held the leading position in the company, comprising about 7 million shares worth $1.3 billion.
In its Q4 2021 investor letter, Longleaf Partners Fund, an asset management firm, highlighted a few stocks and Coinbase Global, Inc. (NASDAQ:COIN) was one of them. Here is what the fund said:
“We also have seen plenty of IPO/SPAC craziness showing both that private players need public markets more than they admit and that there is more volatility embedded in these newer companies than a private quarterly mark might admit. As for how efficient both the private and public markets are, we would encourage you to really delve into some of those multi-hundred-page S1s for many of the newest public companies to see the huge gap between the last valuation at which the company was funded and/or granted shares to its executives and the often much higher price at which the company went public – Coinbase Global, Inc. (NASDAQ:COIN) is a prime example.”
2. Carvana Co. (NYSE:CVNA)
Number of Hedge Fund Holders: 48
Carvana Co. (NYSE:CVNA) is an Arizona-based company that operates an e-commerce platform for buying and selling used cars in the United States. The stock has plummeted about 89% year to date as of July 7, however, analysts, according to Bloomberg, believe that its estimated returns will likely top the Russell 1000 leaderboard. Market experts tell investors to not fret over the almost 90% share price decline, as Carvana Co. (NYSE:CVNA) is due for a 218% rebound.
On July 5, Wedbush analyst Seth Basham reaffirmed an Outperform rating on Carvana Co. (NYSE:CVNA) but lowered the price target on the stock to $50 from $90. The analyst observed that “shares have whipsawed in recent weeks”, including a 31% drop last week as investors were worried about Carvana Co. (NYSE:CVNA)’s liquidity. While the analyst continues to see downside risk to short-term consensus EBITDA estimates due to margin pressure and is revising his estimates, he finds these liquidity concerns unnecessary.
According to Insider Monkey’s database, 48 hedge funds were long Carvana Co. (NYSE:CVNA) in Q1 2022, compared to 56 funds in the prior quarter. Chase Coleman’s Tiger Global Management is the largest shareholder of the company, with 8.5 million shares worth over $1 billion.
Here is what Saga Partners has to say about Carvana Co. (NYSE:CVNA) in its Q1 2022 investor letter:
“I first wrote about Carvana in this 2019 write-up. I initially explained Carvana’s business, superior value proposition compared to the traditional dealership model, attractive unit economics, and how they were uniquely positioned to win the large market opportunity.
Since then, Carvana has by far exceeded even my most optimistic initial expectations. While the company did benefit following COVID in the sense that customers’ willingness to buy and sell cars through an online car dealer accelerated, the operating environment over the last two years has been very challenging. Carvana executed exceedingly well considering the shifting customer demand in what is a logistically intensive operation and what has been a tight inventory environment due to supply chain issues restricting new vehicle production.
Shares have come under pressure following their first quarter results, which reflected larger than expected losses. The quarter was negatively impacted by a combination of COVID-related logistical issues in their network that started towards the end of the fourth quarter as Omicron cases spread. Employee call off rates related to Omicron reached an unprecedented 30% that led to higher costs and supply chain bottlenecks. As less inventory was available due to these problems, it led to less selection and longer delivery times, lowering customer conversion rates.
Additionally, interest rates increased at a historically fast rate during the first quarter which negatively impacted financing gross profits. Carvana originates loans for customers and then sells them to investors at a later date. If interest rates move materially between loan origination and ultimately selling those loans, it can impact the margin Carvana earns on underwriting those loans…” (Click here to see the full text)
1. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 144
Uber Technologies, Inc. (NYSE:UBER) is a California-based mobility technology company. The stock has declined over 48% year to date as of July 7. The company has been unprofitable for four years, and despite the share price tanking this year, analysts believe that the stock is set for a 129% rebound, according to the Bloomberg report we cited in the first part of this article.
On June 29, JPMorgan analyst Doug Anmuth maintained an Overweight rating on Uber Technologies, Inc. (NYSE:UBER) but lowered the price target to $48 from $60. The analyst cut estimates and price targets on 26 companies, citing macro pressures, currency movement, and internal company dynamics. The analyst considers Uber Technologies, Inc. (NYSE:UBER) to be one of his best ideas.
According to Insider Monkey’s database, 144 hedge funds were bullish on Uber Technologies, Inc. (NYSE:UBER) at the end of Q1 2022, down from 153 funds in the earlier quarter. Fisher Asset Management held the biggest stake in the company, with 23.7 million shares worth $849 million.
Here is what ClearBridge Large Cap Growth Strategy has to say about Uber Technologies, Inc. (NYSE:UBER) in its Q3 2021 investor letter:
“We have also been looking for multi-year secular trends outside of the IT and Internet sectors to help us maintain a portfolio that can perform well in markets with varied sector or factor leadership. In particular, electrification of the global economy and the transition to electric vehicles (EVs) are areas where we continue to add exposure. We are investing in the brains behind EVs through NXP in the control center and Aptiv for safety features. Global rideshare leader Uber will also be a key player in the transition from internal combustion engines to EVs.”
You can also take a look at 10 EV Stocks to Buy as Tesla’s Market Share Declines and Cathie Wood’s Latest Thoughts on Inflation and Her 10 Worst-Performing Stock Picks.
