We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
It’s not unusual for a stock to lose interest among market participants after making a big move and then suddenly reversing lower, as investors commonly take their profits and search for the next big winner. This behavior has been on full display over the last several years, specifically toward the original ‘pandemic winners.’
Specifically, three stocks – Zoom Video Communications (ZM - Free Report) , Roku (ROKU - Free Report) , and Shopify (SHOP - Free Report) – have all lost a fair amount of popularity since their original runs. However, analysts have recently become bullish on all three, landing each into a favorable Zacks Rank.
Well off their all-time highs, are they worth another look? Let’s take a deeper dive.
Zoom Video Communications
Zoom Video Communications’ cloud-native unified communications platform combines video, audio, phone, screen sharing, and chat functionalities. The stock is currently a Zacks Rank #2 (Buy), with earnings expectations moving higher across the board.
Image Source: Zacks Investment Research
Better-than-expected quarterly results haven’t been much help for ZM shares since making their all-time high in October 2020, down nearly 90% since. Still, shares have gotten much more attractive from a valuation standpoint, with the current 4.5X forward 12-month price-to-sales ratio a fraction of the steep 19.2X five-year median.
Image Source: Zacks Investment Research
The platform continues to attract new users, with ZM’s enterprise customers growing 5% from the year-ago period throughout its latest quarter. And the company is extracting further value out of each customer, with the number of customers contributing more than $100k in trailing twelve-month revenue growing 14% year-over-year.
Shopify
Shopify, a current Zacks Rank #1 (Strong Buy), provides a multi-tenant, cloud-based, multi-channel e-commerce platform for small and medium-sized businesses. The revisions trend for its current fiscal year is impossible to ignore, up a quad-digit 1650% over the last year to $0.70 per share.
Image Source: Zacks Investment Research
Shopify remains a prime growth stock, with consensus expectations for its current year (FY23) suggesting 1650% earnings growth on 25% higher sales. Peeking a bit ahead to FY24, consensus estimates allude to a further 50% earnings growth paired with a 20% sales bump.
The company’s top line has continued to show notable strength, as illustrated below.
Image Source: Zacks Investment Research
Shopify’s latest quarterly results caused buyers to step up in a big way post-earnings, with the company posting 25% year-over-year sales growth and its fourth consecutive quarter of positive free cash flow. Across its last four releases, the average EPS beat works out to be a sizable 106%.
Roku
Roku, a current Zacks Rank #2 (Buy), pioneered streaming on TV, connecting users to content, enabling content publishers to build and monetize large audiences, and providing advertisers with unique capabilities to engage consumers.
Down more than 80% since their all-time high, it’s been a tough ride for Roku shares. Still, we saw a positive reaction following its latest quarterly release, reflecting a much-needed change in trend. Concerning the quarter, Roku saw modest growth in Active Accounts, with overall Streaming Hours also climbing 20% to 26.7 billion.
Like Shopify, Roku has continued to enjoy solid top line expansion over the last several years.
Image Source: Zacks Investment Research
Keep an eye out for Roku’s next quarterly release scheduled for late February, with the -$0.65 Zacks Consensus EPS Estimate moving 52% higher since last October. Shares have become cheap on a historical basis, with the current 3.2X forward 12-month price-to-sales ratio well below the 7.7X five-year median and highs of 24.3X in 2021.
Image Source: Zacks Investment Research
Bottom Line
Stocks often lose their popularity after melting higher and then reversing, with investors seeking out the next big trade. Still, these stocks are definitely worth keeping tabs on, such as Zoom Video Communications (ZM - Free Report) , Roku (ROKU - Free Report) , and Shopify (SHOP - Free Report) .
While they’re well below all-time highs, analysts have become bullish on the bunch, reflecting renewed optimism.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
3 Beaten-Down Buy-Rated Stocks Worth Another Look
It’s not unusual for a stock to lose interest among market participants after making a big move and then suddenly reversing lower, as investors commonly take their profits and search for the next big winner. This behavior has been on full display over the last several years, specifically toward the original ‘pandemic winners.’
Specifically, three stocks – Zoom Video Communications (ZM - Free Report) , Roku (ROKU - Free Report) , and Shopify (SHOP - Free Report) – have all lost a fair amount of popularity since their original runs. However, analysts have recently become bullish on all three, landing each into a favorable Zacks Rank.
Well off their all-time highs, are they worth another look? Let’s take a deeper dive.
Zoom Video Communications
Zoom Video Communications’ cloud-native unified communications platform combines video, audio, phone, screen sharing, and chat functionalities. The stock is currently a Zacks Rank #2 (Buy), with earnings expectations moving higher across the board.
Image Source: Zacks Investment Research
Better-than-expected quarterly results haven’t been much help for ZM shares since making their all-time high in October 2020, down nearly 90% since. Still, shares have gotten much more attractive from a valuation standpoint, with the current 4.5X forward 12-month price-to-sales ratio a fraction of the steep 19.2X five-year median.
Image Source: Zacks Investment Research
The platform continues to attract new users, with ZM’s enterprise customers growing 5% from the year-ago period throughout its latest quarter. And the company is extracting further value out of each customer, with the number of customers contributing more than $100k in trailing twelve-month revenue growing 14% year-over-year.
Shopify
Shopify, a current Zacks Rank #1 (Strong Buy), provides a multi-tenant, cloud-based, multi-channel e-commerce platform for small and medium-sized businesses. The revisions trend for its current fiscal year is impossible to ignore, up a quad-digit 1650% over the last year to $0.70 per share.
Image Source: Zacks Investment Research
Shopify remains a prime growth stock, with consensus expectations for its current year (FY23) suggesting 1650% earnings growth on 25% higher sales. Peeking a bit ahead to FY24, consensus estimates allude to a further 50% earnings growth paired with a 20% sales bump.
The company’s top line has continued to show notable strength, as illustrated below.
Image Source: Zacks Investment Research
Shopify’s latest quarterly results caused buyers to step up in a big way post-earnings, with the company posting 25% year-over-year sales growth and its fourth consecutive quarter of positive free cash flow. Across its last four releases, the average EPS beat works out to be a sizable 106%.
Roku
Roku, a current Zacks Rank #2 (Buy), pioneered streaming on TV, connecting users to content, enabling content publishers to build and monetize large audiences, and providing advertisers with unique capabilities to engage consumers.
Down more than 80% since their all-time high, it’s been a tough ride for Roku shares. Still, we saw a positive reaction following its latest quarterly release, reflecting a much-needed change in trend. Concerning the quarter, Roku saw modest growth in Active Accounts, with overall Streaming Hours also climbing 20% to 26.7 billion.
Like Shopify, Roku has continued to enjoy solid top line expansion over the last several years.
Image Source: Zacks Investment Research
Keep an eye out for Roku’s next quarterly release scheduled for late February, with the -$0.65 Zacks Consensus EPS Estimate moving 52% higher since last October. Shares have become cheap on a historical basis, with the current 3.2X forward 12-month price-to-sales ratio well below the 7.7X five-year median and highs of 24.3X in 2021.
Image Source: Zacks Investment Research
Bottom Line
Stocks often lose their popularity after melting higher and then reversing, with investors seeking out the next big trade. Still, these stocks are definitely worth keeping tabs on, such as Zoom Video Communications (ZM - Free Report) , Roku (ROKU - Free Report) , and Shopify (SHOP - Free Report) .
While they’re well below all-time highs, analysts have become bullish on the bunch, reflecting renewed optimism.