Cathie Wood, the Chief Investment Officer and CEO of New York-based Ark Investment Management, has become popular among investors because of her “disruptive innovation” investment strategy that involves implementing an iterative process that combines top-down and bottom-up research.

Over the past 24 months, Wood’s flagship fund, ARK Innovation ETF (ARKK), has delivered returns of approximately 35%, excluding dividend contributions. On a total return basis, i.e., when taking dividends into account, the ARK fund has delivered a 39% return, outperforming institutional investment mogul Warren Buffett. ARKK’s 10% gains over the past five days have outpaced the broad SPDR S&P 500 ETF Trust (SPY) 2% gains over the same period.

As of February 10, Wood’s ARKK holds the stocks Coinbase Global, Inc. (COIN), Zoom Video Communications, Inc. (ZM), Roku, Inc. (ROKU), UiPath Inc. (PATH), and Teladoc Health, Inc. (TDOC) among its top 25 holdings. And Wall Street analysts expect these stocks to rally by more than 65% in price in the near term.

Coinbase Global, Inc. (COIN)

San Francisco-based COIN provides financial infrastructure and technology for the crypto-economy. It offers the primary financial account in the crypto economy for retail users.

On September 14, COIN priced 3.375% senior notes due 2028 and 3.625% senior notes due 2031. The company expects the capital raised from the notes to bolster its balance sheet, and it intends to use the net proceeds for general corporate purposes.

For its fiscal third quarter ended September 30, COIN’s total revenue increased 316% year-over-year to $1.31 billion. Its net income and net income per share attributable to common stockholders stood at $406.10 million and $1.62, respectively, up 399.5% and 604.3% from the prior-year quarter.  Its Adjusted EBITDA rose 401.7% from the same period the prior year to $618.22 million.

Analysts expect COIN’s EPS to come in at $12.94 for the fiscal year 2021.

The stock has gained 18.7% in price over the past five days and 2.8% intraday to close yesterday’s trading session at $214.50.

Among the 14 Wall Street analysts rating COIN, 12 have rated it Buy, one has rated it Hold, while one has rated it Sell. The 12-month median price target of $385.23 indicates a 79.6% potential upside. The price targets range from a low of $220.00 to a high of $600.00.

Zoom Video Communications, Inc. (ZM)

ZM operates as a video-first communications platform provider in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa. The San Diego, Calif-based company’s offerings include Zoom Meetings, which provides HD video, voice, chat, and content sharing services through different devices.

On January 10, ZM announced that its Zoom Meeting Client version 5.6.6 has become the first video communications client to attain certification for Common Criteria Evaluation Assurance Level 2 (v3.1 rev. 5), issued by the German Federal Office for Information Security (BSI). This marks a significant milestone for the company.

On December 2, oVice, a two-dimensional virtual space, announced that it had signed a business partnership with ZM to provide oVice customers with service platform access to a Zoom Meeting without having to move from one tool to another. The partnership might prove to be beneficial for the international expansion of ZM.

ZM’s revenue increased 35.2% year-over-year to $1.05 billion in its fiscal third quarter ended October 31. Its non-GAAP income from operations rose 41.4% from the prior-year quarter to $411.28 million. Its non-GAAP net income and non-GAAP net income per share improved 13.9% and 12.1%, respectively, from the same period in the prior year to $338.38 million and $1.11.

The Street’s $4.87 EPS estimate for fiscal 2022 indicates a 45.8% year-over-year increase. Likewise, the Street’s $4.08 billion revenue estimate for the same year reflects a 54% rise from the prior year. In addition, ZM has topped consensus EPS estimates in each of the trailing four quarters.

Over the past five days, the stock has gained 8.6% in price to close yesterday’s trading session at $149.60. It has gained 4.8% intraday.

Twelve of 26 Wall Street analysts have rated ZM as Buy, while 13 have rated it Hold, and one has rated it Sell. The 12-month median price target of $280.19 indicates an 87.3% potential upside. The price targets range from a low of $200.00 to a high of $400.00.

Roku, Inc. (ROKU)

ROKU works as an online TV streaming platform in several countries. The San Jose, Calif.-based company operates in two segments: Platform and Player. Its offerings include the Roku Platform, the Roku Channel, and Roku streaming devices.

On February 2, ROKU reported expanding its advertising business to Mexico. As a part of its launch in the country, ROKU has partnered with Entravision, a digital marketing and media company with local operations in Mexico. This should enable the company to reach even more customers through ad-supported content.

On December 29, ROKU unveiled a new international expansion to the Roku TV Ready™ Certification program by adding new partners to an existing roster of Roku TV Ready partners. In addition, the company announced the expansion of the program internationally with partners launching in the United Kingdom, Canada, and Mexico.

For its fiscal third quarter, ended September 30, ROKU’s total net revenue increased 50.5% year-over-year to $679.95 million, while its total gross profit improved 69.4% from the prior-year quarter to $363.92 million. Its net income and net income per share came in at $68.94 million and $0.48, respectively, up 432.4% and 433.3% from the same period the prior year.

The $1.60 consensus EPS estimate for fiscal 2021 indicates a 1,242.9% year-over-year increase. And the $2.79 billion consensus revenue estimate for the same year reflects a 57% improvement from the prior year. Furthermore, ROKU has an impressive surprise earnings history; it has topped consensus EPS estimates in each of the trailing four quarters.

ROKU’s stock has gained 13.5% in price over the past five days and 5.8% intraday to close yesterday’s trading session at $164.96.

Among  the 15 Wall Street analysts that have rated ROKU, 12 rated it Buy while three rated it Sell. The 12-month median price target of $284.00 indicates a 72.2% potential upside. The price targets range from a low of $136.00 to a high of $400.00.

UiPath Inc. (PATH)

New York City-based PATH offers an end-to-end automation platform that provides a range of robotic process automation (RPA) solutions. The company develops UiPath Studio, a platform designed for RPA developers.

On January 25, PATH announced that it had become the builder sponsor of The Smart Factory @ Wichita, a new Industry 4.0 immersive experience center by Deloitte. Sebastian Seutter, Global Manufacturing Lead at PATH, said, “UiPath is a partner-first company, and to date, we’ve done more than 400 joint engagements with Deloitte with large organizations. We are embarking as a team on this initiative to illustrate to companies around the world how humans working alongside robotic software assistants will rapidly introduce new capacity for value and innovation.”

On January 10, PATH announced a collaboration with Avison Young, a firm that uses its intelligence platform to provide clients with insight and advantages. The collaboration is expected to deploy PATH’s robots to enhance work efficiency. Earlier, in December, PATH announced a collaboration with Accenture PLC (ACN) to accelerate technology transformation efforts. The collaborations might prove to be profitable for the company.

For its fiscal third quarter, ended October 31, PATH’s total revenue increased 49.9% year-over-year to $220.82 million. This can be attributed to a 42.1% rise in revenue from licenses from the prior-year quarter to $111.61 million. Its gross profit stood at $177.72 million, up 36.8% from the same period the prior year.

The Street expects PATH’s revenue to improve 46.4% year-over-year to $247.07 million for its fiscal quarter ending April 2022. In addition, PATH has topped consensus EPS in three out of the trailing four quarters.

PATH’s stock has gained 12.5% over the past five days to close yesterday’s trading session at $37.52. It has gained 2.8% intraday.

13 out of the 18 Wall Street analysts rating PATH have rated it Buy, while five have rated it Hold. The 12-month median price target of $63.11 indicates a 68.2% potential upside. The price targets range from a low of $47.00 to a high of $85.00.

Teladoc Health, Inc. (TDOC)

TDOC is a virtual healthcare service provider in the United States and globally. The Dallas, Tex., company offers technology and expertise for whole-person virtual care, covering various clinical conditions.

On December 16, TDOC announced an expanded partnership with the National Labor Alliance of Health Care Coalitions (NLA) for offering its entire portfolio of virtual care products and services. The partnership might prove to be beneficial for the company by improving access to whole-person care.

On October 6, TDOC made its primary care service, Primary360, available to commercial health plans and for employers or organizations that sponsor healthcare services. Donna Boyer, Chief Product Officer at Teladoc Health, said, “Primary360 has the unique power to drive the unified health care experience that consumers are demanding by removing longstanding barriers like access, cost, and convenience.”

For its fiscal third quarter, ended September 30, TDOC’s revenue increased 80.6% year-over-year to $521.66 million. Its adjusted gross profit and adjusted EBITDA improved 91.5% and 70.5%, respectively, from the prior-year quarter to $352.62 million and $67.37 million.

The Street EPS estimate for the fourth fiscal quarter of 2021 reflects an 81.8% rise year over year. And the Street’s $545.63 million revenue estimate for the same period indicates a 42.3% increase from the prior-year quarter.

TDOC’s shares have gained 4.2% in price over the past five days and 8.5% intraday to close yesterday’s trading session at $75.89.

Of the 21 Wall Street analysts that have rated TDOC, 11 have rated it Buy, while 10 have rated it Hold. The 12-month median price target of $138.40 indicates a potential 82.4% upside. The price targets range from a low of $80.00 to a high of $215.00.

COIN shares were trading at $207.54 per share on Thursday afternoon, down $6.96 (-3.24%). Year-to-date, COIN has declined -17.76%, versus a -5.13% rise in the benchmark S&P 500 index during the same period.

About the Author: Anushka Dutta

Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. More...

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