Analysts see Nio & Zynga as long-term winners

Markets are hitting record highs even as companies face inflationary pressures and labor shortages, but investors need to maintain a long-term perspective when choosing stocks.

Earnings forecasts for future quarters give investors and analysts some insight into what lies ahead for the companies.

That’s why top Wall Street analysts have identified these five companies as long-term winners, according to TipRanks, which tracks top-performing stock voters. Here’s how these stocks are expected to perform as the year ends.

As enterprise infrastructure moves to the cloud, companies helping to manage and secure it are filling the void. data dog (DOG) has seen an impressive run since the 2019 IPO and an yet “extraordinarily strong” third quarter, according to Jack Andrews of Needham & Co. The company recently reported quarterly beats across the board.

Andrews assessed the stock as a buy and raised its price target bullishly from $173 to $236.

He wrote that DDOG’s third-quarter performance was “outstanding” and that “the company represents arguably the strongest fundamental story in all enterprise software.” Andrews believes the company is executing its current offerings well and converting more new customers to multiple products in its suite.

The analyst said that quarter after quarter, more customers are ordering more services, a direct result of DDOG’s rapid pace of product innovation. The company has released new platforms such as the Cloud Security Posture and Cloud Workload Security tools. Datadog’s security services are at an early stage and offer a significant advantage once properly commercialized.

Andrews added that DDOG will “continue to fire on every cylinder possible,” Andrews noted that the existing market competition is largely innocuous and the company should continue to take advantage of its available market.

Financial aggregator TipRanks currently ranks Andrews at number 80 out of more than 7,000 analysts. His success rate stands at 73%. His ratings have returned an average of 53.8%.

Snap a (SNPO) serves as the place to be for smart solutions for homes and businesses. Snap One recently printed a sales beat in its third quarter report and is now focused on consolidating its power in the “living smart” end-market, wrote Jefferies’ Stephen Volkmann.

He said the company has built up a healthy amount of inventory to offset continued supply-side headwinds and that its business model offers broad growth opportunities. Volkmann noted that Snap One is the “latest B2B distributor embarking on what has become a successful investment model to consolidate a fragmented niche market with attractive growth dynamics.”

The analyst assessed the stock as a buy and stated a price target of $24 per share.

Snap One has benefited from inorganic growth through mergers and acquisitions. The company caters to the substantial currents of home integration with its well-established distribution and branch network. Volkmann expects the market to grow at about 11% each year, and supply chain issues have been mitigated somewhat by Snap One’s price increases.

As for the supply-side challenges facing the company, Volkmann expects these to disappear by 2022. This would prime Snap One for higher margins and operating leverage in the long run.

Out of 7,000+ analysts, Volkmann is ranked #232 by TipRanks. His reviews were successful 74% of the time. They have returned an average of 30.1% on each.

zynga (ZNGA) has been successful in its focus on acquiring new users and is working on new games in the pipeline. The social games developer recently printed its highest-ever third-quarter revenue and bookings, due in part to a greater adeptness at publishing new releases and scaling its business.

Wells Fargo’s Brian Fitzgerald identifies a significant advantage in the rating reports, writing that the company has prioritized creating new content and game modes. This strategy is expected to drive user acquisition and retention and return the company to its earlier days of relevance in mobile gaming.

Fitzgerald assessed the stock as a buy and assigned a price target of $13.

The analyst said the tough days of the past are now in the rearview mirror for Zygna as it sees increased interest in its hyper-casual gaming segment. Known for its minimalistic and addictive gameplay, Hyper-casual gaming is one of the fastest-growing genres in the industry.

The company managed its operating costs efficiently. This, combined with the ad growth, results in ‘better than expected operating leverage’.

TipRanks currently calculates that Fitzgerald is number 61 among more than 7,000 other professional analysts. His stock picks were correct 72% of the time, yielding an average of 57.1%.

nio (NIO) recently released its third quarter print as mixed results. While it beat revenue estimates, the outlook for the fourth quarter was more conservative than expected. The current hurdles facing the automaker are supply chain restrictions and a company-wide restructuring of manufacturing, although Vijay Rakesh of Mizuho Securities believes these issues will only affect the short term.

In the long term, the future of the stock looks bright, according to Rakesh. The analyst added that China’s electric vehicle market has expanded to the point that the industry is approaching a “bending in adoption”.

Rakesh assessed the stock as a buy and stated a price target of $67.

Beyond China’s borders, NIO has recently expanded into Norway, solidifying its entry into its next target market. The European launch was a major milestone for the company to complete, with access to the US next on the list.

In addition, Rakesh was encouraged by Nio’s advances in battery technology, which could lower production costs. In addition, the company has innovated its assisted drive systems, which it says will serve as a catalyst for growth.

Rakesh is rated No. 30 by TipRanks among more than 7,000 financial analysts. His stock ratings have resulted in success 79% of the time, and they have yielded an average of 53.7% per rating.

The past year and a half has been wildly successful for cloud-based enterprise management companies such as monday.com (MNDY). The software company benefited from the need for clear digital communication within companies and it seems that the momentum has not yet cooled.

William Blair & Company’s Bhavan Suri wrote that MNDY “massively beat consensus estimates on all major metrics”, and is now well poised for continued upside potential. He added that the company has “best-in-class” sales productivity and has seen encouraging adoption from more successful market players.

Suri assessed the stock as a buy, but he did not give a price target.

The analyst said monday.com’s revenues exceeded its heavy investment in sales and research, and the company now has a balance sheet that can be leveraged. He expects the company to gain more market share in the long run as it continues to perform based on strong business performance.

The recent volatility in stock prices is most likely due in part to uncertainty ahead of the company’s earnings call, as well as to the end of a stock lock-up. If the sharp fall in the share price has nothing to do with the fundamentally healthy business, this offers an attractive entry or buying opportunity for long-term investors, according to Suri.

TipRanks ranks Suri No. 71 out of over 7,000 professional analysts. His stock choices were correct 73% of the time and his ratings had an average return of 66.1%.