Although the most widely followed indices witnessed a comeback last week, the stock market is bracing to close the worst first half of a year in decades. While the Dow Jones Industrial Average rose 5.4% last week, the S&P 500 and the tech-heavy Nasdaq Composite gained 6.5% and 7.5%, respectively.
Many strategists expect quality bottomed-out stocks to make the most of the occasional rebounds. Moreover, as portfolio managers rebalance their portfolios at the end of the second quarter, stocks could increase 7% this week, according to JPMorgan Chase analyst Marko Kolanovic. On top of it, Bank of America Corp. (BAC) analysts expect the next bull market to see S&P 500 trading at 8,900 by February of 2028.
Amid this backdrop, Wall Street analysts expect Remitly Global, Inc. (RELY), Oportun Financial Corporation (OPRT), and LendingTree, Inc. (TREE) to double in the upcoming months. Hence, these stocks might be solid additions to one’s watchlist.
Remitly Global, Inc. (RELY)
RELY is a digital financial services provider for immigrants and their families. The company offers cross-border remittance in several countries.
For the first fiscal quarter ended March 31, RELY’s revenue increased 49.4% year-over-year to $136.01 million. Net cash provided by financing activities came in at $2.60 million, up substantially from its negative year-ago value. Cash, cash equivalents, and restricted cash balance improved 86% from the same period the prior year to $444.66 million.
The consensus EPS estimate for the quarter ending September 2022 indicates a 78% year-over-year increase. Likewise, the consensus revenue estimate for the same quarter of $157.90 million reflects an improvement of 45.2% from the prior-year period.
The stock has gained 3.7% over the past five days and 0.9% intraday to close its last trading session at $9.23.
All four Wall Street analysts rating RELY have rated it Buy. The 12-month median price target of $18.75 indicates a 103.1% potential upside. The price targets range from a low of $14.00 to a high of $23.00.
Oportun Financial Corporation (OPRT)
OPRT operates as a financial services provider. The company’s offerings include personal, auto, and credit loans, serving online and over-the-phone customers, as well as retail customers.
On May 24, OPRT announced the issuance of $400 million of two-year revolving asset-backed notes, which are secured by a pool of unsecured and secured installment loans. “This transaction proves we are able to access growth capital even in challenging markets and demonstrates investor confidence in our A.I.-driven underwriting,” said Jonathan Coblentz, Chief Financial and Administrative Officer at OPRT.
On April 4, the company announced the sale of $228 million of loans through the issuance of amortizing asset-backed notes. This transaction is expected to enable the company to sell its loans at an attractive price and generate capital.
OPRT’s total revenue increased 58.7% year-over-year to $214.70 million in the fiscal first quarter ended March 31. Adjusted net income rose 332% from the prior-year quarter to $52.70 million. Adjusted EPS improved 285.4% from the prior-year period to $1.58.
Street EPS estimate for the fiscal year 2023 of $2.78 reflects a rise of 10.8% from the prior year. Likewise, Street revenue estimate for the same year of $1.10 billion indicates a 24.6% year-over-year improvement. Moreover, OPRT has an impressive surprise earnings history, as it has topped consensus EPS estimates in each of the trailing four quarters.
OPRT’s stock has declined 2.8% intraday to close its last trading session at $8.25.
All of the five analysts rating OPRT have rated it Buy. The 12-month median price target of $25.20 indicates a 205.5% potential upside. The price targets range from a low of $15.00 to a high of $30.00.
LendingTree, Inc. (TREE)
Through its subsidiary LT Intermediate Company, LLC, TREE operates as a consumer platform, offering purchase mortgages, credit cards, and information. The company operates through the three broad segments of Home; Consumer; and Insurance.
On June 23, the company provided its second-quarter guidance. TREE estimates its revenue to lie between $259-$264 million. Adjusted EBITDA is expected to come in between $26-29 million. The company also reported that it remains focused on its strategic initiatives.
For the fiscal first quarter ended March 31, TREE’s revenue increased 3.8% year-over-year to $283.18 million. Adjusted net income and adjusted net income per share came in at $6.07 million and $0.46, up 139.8% and 155.6% from the same period the prior year.
Analysts expect TREE’s EPS to increase 8% year-over-year to $0.81 for the quarter ending September 2022. Street expects revenue for the same quarter to rise 4.2% from the prior-year period to $310.02 million. In addition, TREE has topped consensus EPS estimates in each of the trailing four quarters, which is impressive.
TREE’s shares have gained 1.5% over the past five days to close its last trading session at $50.55.
Of the seven analysts rating the stock, six have rated it Buy, and one has rated it Hold. The 12-month median price target of $130.33 indicates a 157.8% potential upside. The price targets range from a low of $62.00 to a high of $190.00.
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RELY shares were unchanged in after-hours trading Monday. Year-to-date, RELY has declined -56.79%, versus a -17.58% 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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