Investors recently navigated a turbulent stretch in the stock market, where the Trump administration’s tariff talk shook up the major averages. Despite a late-week rally, stocks still closed the week in the red.
Amidst such volatility, savvy investors are keeping an eye on the stock recommendations from top Wall Street analysts. Their insights could help build a robust portfolio designed to withstand short-term swings and achieve solid long-term gains.
Let’s delve into three stocks that have captured the attention of leading analysts, as highlighted by TipRanks, a platform known for evaluating the accuracy of analysts’ forecasts.
### Zscaler
Kicking off the list is Zscaler (ZS), a notable player in the cloud-based cybersecurity sector. The company is renowned for its Zero Trust Exchange platform, which ensures secure connectivity to ward off cyber threats and prevent data breaches. Zscaler grabbed the spotlight with its impressive performance in the second quarter of fiscal 2025, largely driven by the uptake of Zero Trust and advancements in artificial intelligence.
Following these strong results, Shaul Eyal, an analyst from TD Cowen, reaffirmed his buy rating on Zscaler, setting a price target of $270. Eyal attributed the upbeat performance to several factors, including a revamped marketing strategy, improved sales retention for the second straight quarter, and elevated sales productivity, with further gains anticipated later in the fiscal year.
Eyal also highlighted the impact of AI on demand and product innovation, noting a near doubling of the annual contract value stemming from their AI Analytics portfolio. Looking ahead, Zscaler aims to hit $3 billion in annual recurring revenue by the end of fiscal 2025.
Discussing Zscaler’s federal operations, Eyal noted the company’s service to 14 of the 15 U.S. cabinet agencies and its potential benefits from Elon Musk’s envisioned Department of Government Efficiency, thanks to cost-saving advantages. Additionally, he pointed to the company’s robust presence among large customers, with those generating more than $1 million in annual recurring revenue increasing by 25% year over year to 620 clients.
“With a mix of innovation and strategic acquisitions, Zscaler has broadened its capabilities and extended its reach into related areas,” remarked Eyal.
Eyal ranks 18th among over 9,400 analysts tracked by TipRanks, with his recommendations proving profitable 65% of the time, providing an average return of 23.9%. See Zscaler Hedge Funds Trading Activity on TipRanks.
### Costco Wholesale
Next is Costco Wholesale (COST), the warehouse chain renowned for its membership-driven model, which recently reported mixed results for its second quarter of fiscal 2025. While it surpassed revenue expectations due to higher comparable sales, earnings fell short of predictions.
Corey Tarlowe from Jefferies pointed out that the earnings miss stemmed from weaker-than-expected growth in the Q2 FY25 gross margin and was further impacted by foreign exchange issues and other elements. Nonetheless, Tarlowe praised Costco’s robust comparable sales and increased membership fees.
He noted that despite challenges faced by other retailers, Costco managed an impressive 8.3% growth in adjusted comparable sales, bolstered by strength in its non-food offerings. Furthermore, U.S. comps benefited from increased foot traffic and ticket size.
Tarlowe sees Costco as having potential to expand its warehouse network and highlighted its limited exposure to the Trump administration’s newly announced tariffs. The retailer disclosed that about a third of its U.S. sales stem from imports, primarily from China, Mexico, and Canada.
“We believe Costco’s scale and high private label penetration will help shield the company from the adverse effects of tariffs,” Tarlowe commented. He maintained a buy rating on Costco stock and lifted the price target from $1,145 to $1,180.
Tarlowe ranks 664th among over 9,400 analysts on TipRanks, with a success rate of 55% and average returns of 11.4%. See Costco Ownership Structure on TipRanks.
### Karman Holdings
The final stock on our list is Karman Holdings (KRMN), a freshly public company specializing in defense and space systems. Their diverse line-up includes payload and protection systems, aerodynamic interstage systems, and propulsion and launch solutions.
Amit Daryanani from Evercore initiated coverage of Karman with a buy rating, setting a price target of $38. Daryanani is optimistic about the company’s growth prospects, bolstered by several secular tailwinds.
Daryanani pointed to the promising growth of the U.S. orbital launch market, where Karman supplies every U.S. launch provider, alongside heightened interest in missile defense and hypersonics in the U.S. He is also positive about Karman’s prospects given the ongoing restocking of missile inventories by the U.S. and NATO allies.
Looking ahead to fiscal 2025, Daryanani anticipates Karman’s sales will grow by 18% year over year to $409 million, with earnings per share reaching 36 cents. He also expects the company’s EBITDA margin to expand by 100 basis points to 31%.
Overall, Daryanani believes Karman is “well positioned for sustained mid/high teens growth given their unique standing in all the rapidly expanding military and space sectors.”
Daryanani ranks 478th among over 9,400 analysts tracked by TipRanks, with his recommendations succeeding 53% of the time and delivering average returns of 10.3%. See Karman Holdings Technical Analysis on TipRanks.
