Remote lifestyles and an increasing reliance on technology products and services helped many companies generate solid growth last year. And their stocks’ skyrocketing rally has in some instances made them overvalued. When the economy started recovering this year, investors opted to drop these stocks in favor of quality bargains that are well positioned to gain with the economic recovery…
While the sector rotation led to a sell-off of overvalued pandemic winners, many of those companies still hold immense growth potential. That’s because many of the pandemic-driven trends, particularly remote working and shopping, are expected to continue in the post pandemic world. This, along with the increased scope of these businesses in a post-pandemic world and current easy monetary policy, is boosting analysts’ confidence in the upside some of these stocks can still deliver.
Wall Street analysts expect Baidu, Inc. (BIDU – Get Rating), Peloton Interactive, Inc. (PTON – Get Rating), and QuantumScape Corporation (QS – Get Rating) to rally by more than 45% in the near-term. This, coupled with their strong fundamentals, makes them worth adding to one’s watchlist.
Baidu, Inc. (BIDU – Get Rating)
Headquartered in Beijing, China, BIDU offers a Chinese language search platform on its Baidu.com website that allows users to find information online, including webpages, news, documents and multimedia files, through links provided on its website. The company operates through two segments—Baidu Core and iQIYI. Baidu Core provides search-based, feed-based, and other online marketing services, while iQiyi is an online entertainment service provider that offers original, professionally produced and partner-generated content on its platform.
On April 26, 2021, at BIDU’s 2021 Wanxiang Conference, Baidu Mobile Ecosystem Group unveiled its new X+Y strategy to advance intelligent search through “servitization” and “humanization” and announced its new brand slogan: “Baidu for a Better Life”. BIDU aims to provide a better end-to-end experience for users and to strengthen the commercial value of its search tools.
On March 17, BIDU priced a global offering of 95 million new Class A ordinary shares, which comprises an international offering and a Hong Kong public offering. The shares were priced at HK$252.00 each. BIDU plans to use the proceeds from the offering for technology investments in Baidu Mobile Ecosystem, for working capital and for general corporate purposes.
BIDU is scheduled to report its fiscal 2021 first quarter financial results on May 18, before the market opens. For the fourth quarter, ended December 31, 2020, the company’s total revenues increased 4.8% year-over-year to $4.64 billion. Its non-GAAP operating income was $1.08 billion, which represents a 4.5% improvement year-over-year. And its total assets increased 10.4% year-over-year to $332.71 billion as of December 31, 2020.
Analysts expect BIDU’s EPS to improve 12.8% year-over-year for the current quarter, ending June 30, 2021, to $2.46. It has surpassed the Street’s EPS estimates in each of the trailing four quarters. And its 44.65 billion consensus revenue estimate for the current quarter represents a 21.2% rise on a year-over-year basis.
The stock has gained 114.4% over the past year and 81.9% over the past nine months. BIDU closed yesterday’s trading session at $216.46.
Of 17 Wall Street analysts that have rated the stock, 15 rated it a Buy and two rated it Hold. The average price target of $351.60 indicates a potential upside of 62.4%.
Peloton Interactive, Inc. (PTON – Get Rating)
Headquartered in New York, PTON provides an interactive fitness platform and delivers in-studio fitness classes, fitness clubs, at-home fitness equipment & content, and health & wellness apps. The company operates through three segments: Connected Fitness Products, Subscription, and Other. It markets and sells its interactive fitness products directly through its retail showrooms and at onepeloton.com.
On April 1, PTON closed the acquisition of Precor, one of the largest global commercial fitness equipment providers. It hopes to establish its U.S. manufacturing capacity and boost research and development capabilities with Precor’s highly skilled team, and to accelerate its penetration of the commercial market. Also, PTON plans to produce connected fitness products in the U.S. and enhance its customer experience before the close of 2021.
In an announcement dated March 8, PTON said it will…
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