These stocks aren’t being treated fairly say analysts. The market is undervaluing their real potential. But that’s good news for investors- because it means we have a compelling investing opportunity at hand. Here we see why these three five-star analysts are confident that these stocks deserve to move higher. And as TipRanks tracks and ranks analysts, we can see that these analysts know what they are talking about when it comes to stock picking. Let’s delve in now:
Netflix (NFLX)
The streaming giant has just received a big boost from top-rated Goldman Sachs analyst Heath Terry (Track Record & Ratings). This five-star analyst believes that shares can spike 25% from current levels.
“Despite Netflix outperforming consensus estimates for net subscriber additions for the past five years, analyst forecasts continue to understate the company’s future growth, both near and long term, in our view,” Terry explained.
He sees out-of-home mobile viewing as a big source of potential subscribers, especially in countries like India. The firm forecasts 30 million net adds in 2019 versus consensus estimates of 25 million.
As we can see from the screenshot below, Terry may be notably above consensus, but he is not the most bullish analyst on the stock. That award goes to Imperial Capital’s David Miller (Track Record & Ratings). His Street-high $494 price target suggests upside potential of over 30%.
Rhythm Pharmaceuticals Inc (RYTM)
This biopharma is developing treatments for rare genetic deficiencies that result in life-threatening metabolic disorders.
Notably, Rhythm has just announced updated clinical data from setmelanotide’s Phase II “basket” study in several rare genetic obesity disorders. This includes both Bardet-Biedl Syndrome (BBS) and Alström Syndrome.
“We continue to think that Rhythm is undervalued for setmelanotide’s potential” cheers Cowen & Co’s Phil Nadeau (Track Record & Ratings). He has just reiterated his Buy rating on the stock with a $40 price target. From current levels that translates into over 39% upside potential.
According to Nadeau “Setmelanotide’s impact continues to look durable, with responders maintaining reductions in weight and appetite for over a year.”
Plus as there are approx 2,500 patients with BBS in the US, the BBS market could be a major driver of setmelanotide’s revenue. “The fact that the basket trial is demonstrating durable and meaningful efficacy, as well as a high response rate, increases our confidence in our long-term setmelanotide estimates” the Cowen & Co analyst wrote.
Next step: Rhythm is planning a Phase III study that will include both BBS and Alström patients. By combining both indications, the company expects a more rapid path to approval.
The trial is expected to initiate by YE:2018.
Twilio (TWLO)
Cloud communications pioneer Twilio has just received the thumbs up from top Monness analyst Brian White (Track Record & Ratings). He is growing increasingly upbeat on the stock- and has just boosted his price target from $85 to $108. We are now looking at upside potential from current levels of over 36%.
“Given the positive fundamental trends at Twilio with our estimates reflecting the second-highest revenue growth rate in our coverage universe this year (up 47%), and on the cusp of opening up a new growth vector with Twilio Flex, we are raising our 12-month price target” explains White.
Twilio Flex was announced in March and described by Twilio as “the world’s first fully programmable cloud contact center platform.” Look out for more details on Twilio Flex at Twilio’s customer and developer conference, SIGNAL, on October 17 and 18 in San Francisco.
“Today, Twilio trades at significant discount to the valuations of high-growth tech companies of the past” White concludes. “The company has grown sales at a four-year CAGR of 68% and we believe Twilio is undervalued at current levels based on the growth trajectory we see ahead for the company.”
Note that the Street has a unanimously bullish outlook on the stock (based on the last three months of ratings):
