As the stock market roars ahead and the winds of economic change blow, the current earnings season has left investors excited. With the Nasdaq reaching unprecedented heights, the robust financial reports are providing a much-needed impetus to our economy. These developments have set the stage for a significant shift in momentum in 2024. The signs of economic expansion are growing strong, unfurling like fresh leaves after a long, cold winter. Surprisingly strong financial performances from several companies have led to analyst upgrades, sparking newfound interest in these market darlings. Now is the time for investors to pounce on these stock market victors of the earnings season.
Coinbase (COIN)
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There was a lot of buzz surrounding Coinbase (NASDAQ:COIN) before the company announced its results, but its resounding financial success put all doubts to rest. For investors wary of the vagaries of the crypto market, backing Coinbase emerges as a steady choice. A standout performer this earnings season, Coinbase obliterated expectations, reporting its inaugural profit of $273.4 million.
This marked a significant leap from the previous year’s loss of $557 million. The company’s revenue soared to $953.8 million, a 51% year-over-year (YoY) increase, while its net income reached $1.04 per share. Transaction revenue swelled to $529.3 million, and it anticipates an even more robust 2024 with sales projected to reach $410 to $480 million.
The renewed fervor for cryptocurrencies led to existing users engaging in higher trading volumes. The robust results catapulted the stock, surging 27% in just one week from $140 to $180. Once deemed an unprofitable entity with low expectations, the market’s perception of Coinbase has pivoted. It remains to be seen whether the company can sustain this newfound profitability. Nevertheless, as macroeconomic conditions improve, a resurgence in crypto investor interest could propel the stock to greater heights. trading at $180 today, the stock has surged 190% over the past year, with the potential for further upside.
Following its stellar performance, several analysts have upgraded their outlook on the stock. H.C. Wainwright has set a price target of $250 with a Buy rating. Meanwhile, Needham analysts raised the stock’s price target to $220, and Oppenheimer has also upped the price to $200. Wedbush analyst Moshe Katri has pitched a price target of $200, and JMP Securities raised its price target from $200 to $220 with a market Outperform rating.
Earnings Season Winners to Buy: Shopify (SHOP)
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The e-commerce powerhouse Shopify (NYSE:SHOP) has ascended to the echelons of elite stocks. The company’s remarkable financial showing has propelled its stock a formidable 93% over the past year. trading at $81 today, I anticipate it breaching the $100 mark imminently.
Shopify’s unrivaled success can be attributed to its user-friendly platform, offering seamless setup and a gamut of services encompassing marketing, website hosting, and payment processing. With its stellar interface and services, merchants exhibit reluctance to shift to alternative platforms.
The company has embarked on a series of cost-cutting measures including downsizing its workforce and divesting its logistics arm. This strategy has bolstered its cash reserves, endowing it with robust liquidity. Constant business tool enhancements and technical refinements have fortified the company’s position.
Fundamentally robust, Shopify has witnessed a 24% surge in sales and a 33% rise in gross profit, with the gross merchandise volume registering a 23% uptick, signaling potential for further augmentation. Post its strong performance, several analysts have revised their price targets for Shopify.
UBS bestowed a price target of $80 with a Neutral rating, whereas Roth MKM analyst Darren Aftahi raised the price target to $89 with a Buy rating. Oppenheimer’s Ken Wong has accorded an Outperform rating with a price target of $90. Despite the recent pullback in SHOP stock from $91 to $81, this presents a formidable buying opportunity.
Ferrari (RACE)
Ferrari Races Ahead with Lewis Hamilton: A Financial Triumph
A Legendary Addition
There are several reasons Ferrari (NYSE:RACE) is racing faster in 2024. It has an upbeat outlook for the year as the demand for its cars is strong. But another reason the company is being discussed every day is Lewis Hamilton.
The Formula 1 racing legend will now be a part of the Ferrari team from next year and that is a huge win for the company. That converts into more revenue, higher sponsorship and an increase in merchandise sales.
Racing Profits
The automaker reported impressive earnings with a record year of profits. Its net profit was $1.36 billion for the year, and the revenue was up 17% to hit $6.46 billion. The management has an even better forecast for the year and expects a revenue of over $6.9 billion. RACE stock is trading at $389 today and is up 25% in the past 6 months.
A Class Apart
RACE is a long-term buy and hold. The company is one of its kind and caters to the ultra-luxurious segment. Inflation couldn’t affect its revenue and profit, and that shows it is here to stay for years to come. Next year could be a very important year for the company.
Analyst Predictions
Driven by the results and the announcement of Lewis Hamilton joining Ferrari, several analysts have upgraded their price target for the stock. RBC Capital analyst Tom Narayan has a Buy rating for the stock with a price target of €380, JPMorgan (NYSE:JPM) has a Hold rating for the stock and UBS gave it a Buy rating with a price target of €413.00.
Conclusion
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com
