The Reddit community, r/WallStreetBets, gained popularity after retail investors on the forum helped push GameStop Corporation (GME) and AMC Entertainment Holdings, Inc. (AMC) stock to astronomical highs. However, the price gains could not be sustained, given the stocks’ weak fundamentals.

Over the past year, retail trading has increased significantly, owing to the easy to access trading apps like Robinhood Markets, Inc. (HOOD). Retail investing is primarily influenced by trends, the news, and social media. Amateur investors have increased to around 23% of all equity trading in the US, compared to just 10% in 2019. Retail investors on Reddit forums have triggered several short squeezes this year. Experts anticipate that the retail trading frenzy raising stocks to astronomical heights can continue into the next year.

Wall Street analysts expect a more than 90% upside in WallStreetBets stocks Peloton Interactive, Inc. (PTON), Virgin Galactic Holdings, Inc. (SPCE), and IronNet, Inc. (IRNT).

Peloton Interactive, Inc. (PTON)

PTON is an interactive fitness products provider operating in North America and globally. The company’s offerings include connected fitness products with touchscreen for on-demand classes and connected fitness subscriptions for users.

On November 16, PTON announced the pricing of its underwritten public offering of 23,913,043 shares at $46 per share. The expected net proceeds of $ 1.07 billion are intended to be used by the company for general corporate purposes, including expansion of its facilities and investments in acquisitions.

On November 9, the company unveiled its first connected strength product, Peloton Guide, which gives members access to PTON’s content library and expert instructors. The accessibly-priced hardware product should add to the company’s revenue stream.

For the fiscal first quarter, ended September 30, PTON’s total revenues increased 6.2% year-over-year to $805.20 million. This can be attributed to a rise of 94.3% from the prior-year quarter in subscription revenues to $304.10 million. Net cash provided by financing activities improved 57.4% from the same period last year to $29.60 million.

The consensus EPS estimate for the next year (fiscal 2023) indicates a 70.3% year-over-year increase. Likewise, the consensus revenue estimate of $5.83 billion reflects a rise of 27.4% from the current year.

The stock has declined 1.9% intra-day to close yesterday’s trading session at $38.50.

Of the 26 Wall Street analysts rating PTON, 11 have rated it Buy, while 13 have rated it Hold. The 12-month median price target of $75.00 indicates a 94.8% potential upside. The price targets range from a low of $45.00 to a high of $110.00.

Virgin Galactic Holdings, Inc. (SPCE)

SPCE operates as an integrated aerospace company that engages in developing human spaceflight for private individuals and researchers in the country. The company offers and operates commercial human spaceflight, flying commercial research, and development payloads in space.

On October 14, SPCE announced the commencement of its planned enhancement program. The program is expected to improve vehicle performance and flight-rate capability for VMS Eve and VSS Unity. The company also plans to conduct the Unity 23 test flight after the enhancement program is completed.

In September, SPCE declared that the company cleared a Federal Aviation Administration (FAA) inquiry for flying FAA-licensed spaceflights. About the inquiry, Michael Colglazier, Chief Executive Officer of SPCE, said, “We appreciate the FAA’s thorough review of this inquiry. Our test flight program is specifically designed to improve our processes and procedures continually. The updates to our airspace and real-time mission notification protocols will strengthen our preparations as we move closer to the commercial launch of our spaceflight experience.”

SPCE’s revenues increased 1,223.9% year-over-year to $3.15 million in the nine months ended September 30. Gross profit improved 4,332.3% from the same period last year to $2.88 million. Net cash provided by financing activities came in at $495.91 million, up 13% year-over-year.

Street EPS estimate for the next year (fiscal 2022) reflects an improvement of 17.3% from the ongoing year. Likewise, Street revenue estimate of $8.63 million for the upcoming year indicates a 172.2% year-over-year rise.

The stock has gained 0.8% intra-day to close yesterday’s trading session at $14.77.

Out of the 10 Wall Street analysts rating SPCE, five have rated SPCE Buy, while two have rated it Hold, and three have rated it Sell. The 12-month median price target of $29.20 indicates a 97.7% potential upside. The price targets range from a low of $15.00 to a high of $50.00.

IronNet, Inc. (IRNT)

IRNT functions as a cyber-attack solutions designer and developer. The company offers a network traffic analysis platform called IronDefense, and a collective defense solution called IronDome. It went public after a business combination with LGL Systems Acquisition Corp on August 27, 2021.

On October 27, IRNT announced that it had joined Microsoft Corp. (MSFT), Microsoft Intelligent Security Association (MISA), for empowering MSFT consumers’ cloud transitions amid sophisticated cyberattacks. The venture can prove to be profitable for IRNT.

Earlier in October, IRNT announced the addition of nuclear reactor and fuel design engineering company, X-energy, and a low-Earth orbit (LEO) satellite-based positioning, navigation, and timing (PNT) company, Satellites to IRNT’s Collective Defense Community for Space, aiming to provide faster response to cyberattacks. The collaborative effort might prove to be beneficial for the company.

For the nine months ended October 31, IRNT’s net cash provided by financing activities increased 108% year-over-year to $103.38 million. The company’s cash and cash equivalents balance stood at $73.89 million, registering an improvement of 247.5% from the same period last year.

Street expects IRNT’s revenue to increase 233.6% year-over-year to $20.27 million in the next quarter (ending April 2022).

The stock has gained 2.1% intra-day to close yesterday’s trading session at $6.80.

One out of the three analysts rating IRNT rated it Buy. The 12-month median price target of $19.50 indicates a 186.8% potential upside. The price targets range from a low of $10.00 to a high of $29.00.

PTON shares were trading at $39.40 per share on Thursday afternoon, up $0.90 (+2.34%). Year-to-date, PTON has declined -74.03%, versus a 25.76% 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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