In February, the stock market faced quite a turbulent period marked by discouraging economic reports, low consumer confidence, and worries over tariffs. Consequently, the S&P 500 saw a 1.4% dip during this time.
For investors navigating such uncertain waters, it’s wise to focus on companies capable of weathering these temporary storms while capitalizing on growth opportunities for future gains. Turning to the advice of leading Wall Street analysts, who conduct thorough assessments of a company’s strengths, challenges, and potential, can be especially insightful when selecting stocks.
With that in mind, here are the top three stock picks from seasoned analysts, as compiled by TipRanks, a platform known for evaluating analysts based on their previous success.
Booking Holdings
Let’s start with Booking Holdings (BKNG), a prominent player in the online travel agency sector. Recently, the company delivered impressive fourth-quarter results, fueled by strong travel demand. Booking Holdings is actively investing in long-term growth, implementing various strategies, such as utilizing generative artificial intelligence to enhance the experience for travelers and partners.
In response to these outstanding results, Evercore analyst Mark Mahaney reaffirmed his buy rating on BKNG, raising the price target from $5,300 to $5,500. Mahaney emphasized the company’s success across all geographic regions and travel sectors during Q4, with notable improvements in fundamental metrics like bookings, revenue, and room nights growth.
Despite being significantly larger than competitors like Airbnb and Expedia, in terms of room nights, BKNG outpaced both in bookings, revenue, and room night growth in Q4 2024. Mahaney attributes this to BKNG’s massive scale, superior growth, high margins, and an experienced management team, viewing it as the premium online travel stock.
Importantly, Mahaney sees BKNG’s stock as reasonably priced with robust earnings per share growth of 15%, solid free cash flow, and a consistent track record. He is optimistic about BKNG’s strategic investments in areas like merchandising, flights, payments, and AI, observing growing traffic to the company’s website. Mahaney ranks highly among over 9,400 analysts on TipRanks, with a profitable rating of 61% and an average return of 27.3%.
Visa
Next, we have Visa (V), a giant in the payments processing industry. During their investor day event on February 20, Visa outlined its growth strategy, focusing on the potential revenue from its Value Added Services (VAS) and other business areas.
Following this event, Rufus Hone, an analyst at BMO Capital, reiterated his buy rating on Visa with a price target of $370. Hone highlighted the insights provided at the event, addressing key investor concerns about the remaining potential in Consumer Payments and the company’s ability to sustain high growth in VAS.
Visa estimates a $41 trillion opportunity in Consumer Payments, noting $23 trillion remains underserved by current payment infrastructure, showcasing their potential growth space. The company predicts a shift in revenue mix towards faster-growing sectors like Commercial & Money Movement Solutions and VAS, anticipating these will make up over 50% of their revenue, up from one-third in FY24. Hone views Visa as a key holding in the U.S. financial sector, confident in its ability to maintain double-digit top-line growth. Hone himself ranks impressively on TipRanks, with a successful rating of 76% and an average return of 16.7%.
CyberArk Software
Finally, there is CyberArk Software (CYBR), which recently announced strong results for Q4 2024, driven by the demand for its identity security solutions. Following their investor day on February 24, Baird analyst Shrenik Kothari kept his buy recommendation and increased the price target to $465.
Kothari applauded CyberArk’s leadership in cybersecurity, highlighting its revised $80 billion total addressable market from a previous $60 billion. This growth is attributed to rising demand for machine-identity solutions, AI-driven security, and modern Identity Governance and Administration (IGA) solutions. CyberArk is strategically positioned to capture this market, particularly following its Venafi and Zilla Security acquisitions.
Additionally, CyberArk’s innovations in AI, like the launch of CORA AI, enable it to meet current security needs. Kothari pointed out the company’s goals of achieving $2.3 billion in annual recurring revenue and a 27% free cash flow margin by 2028, supported by platform consolidation trends. Kothari’s track record is notable, ranking 78th among over 9,400 analysts on TipRanks with a successful rating of 74% and an average return of 27.7%.
These top picks, according to skilled analysts, present robust opportunities for investors looking to navigate the market’s current volatility and invest in companies with strong growth potential.
