Although the most followed indexes saw a comeback last week, the stock market is preparing to close the worst first half in decades. While the Dow Jones Industrial Average rose 5.4% last week, the tech-heavy S&P 500 and Nasdaq Composite gained 6.5% and 7.5%, respectively.
Many strategists expect bottoming quality stocks to make the most of the occasional rally. Additionally, as portfolio managers rebalance their portfolios at the end of the second quarter, stocks could increase by 7% this week, according to JPMorgan Chase analyst Marko Kolanovic. Additionally, Bank of America Corp. (BAC) analysts expect the next bull market to see the S&P 500 trading at 8,900 by February 2028.
Against this backdrop, Wall Street analysts expect Remitly Global, Inc. (COUNT), Opportun Financial Corporation (OPRT) and LendingTree, Inc. (TREE) to double in the coming months. Therefore, these stocks could be solid additions to his watch list.
Remitly Global, Inc. (COUNT)
RELY is a provider of digital financial services for immigrants and their families. The company offers cross-border money transfers in several countries.
For the fiscal first quarter ended March 31, RELY’s revenue increased 49.4% year-over-year to $136.01 million. Net cash from financing activities was $2.60 million, up substantially from its negative value a year ago. Cash, cash equivalents and restricted cash the balance improved by 86% compared to the same period the previous year to reach $444.66 million.
The consensus EPS estimate for the quarter ending September 2022 indicates a 78% year-over-year increase. Similarly, the consensus revenue estimate for the same quarter of $157.90 million reflects a 45.2% improvement over 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 rated it Buy. The 12-month median price target of $18.75 indicates a 103.1% upside potential. Price targets range from a low of $14.00 to a high of $23.00.
Financial Company of Oportun (OPRT)
The OPRT operates as a financial service provider. The Company’s offerings include personal, auto and credit loans, serving online and telephone customers, as well as retail customers.
On May 24, the OPRT announced the issuance of $400 million of two-year renewable asset-backed notes, which are secured by a pool of unsecured and secured installment loans. “This transaction demonstrates that we are able to access growth capital even in challenging markets and demonstrates investor confidence in our AI-powered underwriting,” said Jonathan Coblentz, Chief Financial and Administrative Officer at OPRT.
On April 4, the company announced the sale of $228 million in loans through the issuance of amortizing asset-backed notes. This transaction should allow 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 increased 332% from the prior year quarter to $52.70 million. Adjusted EPS improved 285.4% from the prior year period to $1.58.
The Street EPS estimate for fiscal 2023 of $2.78 reflects a 10.8% increase over the prior year. Similarly, Street’s revenue estimate for the same year of $1.10 billion indicates a 24.6% year-over-year improvement. Additionally, the OPRT has an impressive track record of surprise earnings, as it has exceeded consensus EPS estimates in each of the past four quarters.
OPRT’s stock fell 2.8% during the day to close its last trading session at $8.25.
All five analysts who rate the OPRT have rated it Buy. The 12-month median price target of $25.20 indicates a 205.5% upside potential. 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 major home segments; Consumer; and Insurance.
On June 23, the company released its guidance for the second quarter. TREE estimates its revenue to be between $259 million and $264 million. Adjusted EBITDA is expected to be between $26 million and $29 million. The company also indicated that it remains focused on its strategic initiatives.
For the first fiscal quarter ended March 31, TREE’s revenue increased 3.8% year-over-year to $283.18 million. Adjusted net earnings and adjusted net earnings per share were $6.07 million and $0.46, up 139.8% and 155.6% from the same period of the year former.
Analysts expect TREE’s EPS to rise 8% year-over-year to $0.81 for the quarter ending September 2022. Street expects same-quarter revenue increased by 4.2% over the prior year period to $310.02 million. Additionally, TREE has exceeded consensus EPS estimates in each of the past four quarters, which is impressive.
Shares of TREE have gained 1.5% over the past five days to close its last trading session at $50.55.
Of the seven analysts who rate the stock, six rated it Buy and one rated it Hold. The 12-month median price target of $130.33 indicates a 157.8% upside potential. Price targets range from a low of $62.00 to a high of $190.00.
Shares of RELY remained unchanged in after-hours trading on Monday. Year-to-date, RELY is down -56.79%, compared to a -17.58% rise in the benchmark S&P 500 over 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. After…