While every market consultant will tell you to never try to ‘time’ the market, timing is still crucial to success. Investors need to buy low, and to do that, they need to know when prices are low. This doesn’t necessarily mean low in absolute dollar terms, but low relative to the stock’s recent performance.
Once that lower price range is recognized, investors can turn to the experts of Wall Street for help. Recently, analysts have been very busy, picking out stocks that are in the lower price zone and are forecast to rise sharply.
We used TipRanks database to look up two such stocks; According to Wall Street analysts, each has dropped more than 50% in the past year, but each also boasts a Buy rating and solid upside potential. Here are the details.
Disco CS, Inc. (LAW)
We’ll start with CS Disco, a software company that puts AI, cloud computing, and data analytics under the guidance of the legal profession. CS Disco’s services include solutions to manage legal claims, enhance discovery, document review and case building processes – and that’s just the beginning. The firm serves law firms, corporations and educational institutions with a scalable system geared towards legal matters.
While there is never a shortage of demand for legal services in our highly religious society, LAW stock has struggled over the past 12 months, down ~76%. The stock drop comes as the company has seen growing quarterly losses, and management last summer cut its revenue forecast for full 2022 by 11% and predicted an average Deeper-than-expected annual net loss for ’22.
Acknowledging the company’s setbacks, Canaccord’s five-star analyst David Hynes wrote: “We’ve come to the point with Disco that the stock is simply too cheap for the potential of this business.. This is a stock that has gone from vertical to the next. The giant had trouble with the child for 18 months. Some of this is self-inflicted, namely that the model and the team don’t provide enough forward-looking metrics to make you believe, but much of that feels to us like growing pain. large of a business is still small-scale.”
“Whatever the culprit, with LAW stock currently trading at around 1.0x EV/R on C2023E, we feel it’s time for a more constructive assessment of the stock. stocks… With the growth rate improving, confidence will be restored and if that’s true, it’s nothing to say that this isn’t at least a 3-4x EV/R stock, which according to current estimates in 2023 will value LAWs at $11-13,” Hynes added.
Therefore, it is not surprising that Hynes rates the LAW as a Buy. Not to mention his $12 price target puts the upside potential at ~55%. (To see Hynes’ achievements, click here)
Overall, there are 9 recent analyst reviews of LAW and they include 5 Buys, 3 Holds and 1 Sell – giving the stock a Buy Moderate consensus rating. The stock is selling for $7.75 and an average price target of $11.56 suggests ~49% upside potential over the next 12 months. (See LAW . stock forecast)
Turtle Beach Joint Stock Company (LISTEN)
Next up is Turtle Beach, a San Diego-based gaming accessories company. While computer gaming software companies tend to make headlines, games wouldn’t go anywhere without the hardware that companies like Turtle Beach design and manufacture – headsets, sets controls, simulation systems, microphones and other audio devices. Turtle Beach started operating in the 1970s and is especially popular today for its console gaming headsets and audio.
However, Turtle Beach shares have fallen 53% over the past year. In late 2021 and continuing into 2022, the company experienced a sharp decline in earnings and profitability, shifting from quarterly net profit to loss, and stock prices began to decline in response. In midsummer, it was clear demand – which had spiked during the pandemic, as lockdowns forced people to stay at home and prioritized home entertainment options like computer gaming. – has fallen and not recovered – or at least, not recovering anytime soon.
In addition to the setbacks in the games sector, Turtle Beach explored the possibility of an acquisition in 2022, but by the end of the summer those moves had failed. In August, the company’s Board of Directors officially decided not to sell, at least for now, and the stock was down ~30% when that news came out. Simultaneously.
Analyst Sean McGowan, writing in Turtle Beach for Roth Capital, said that the ‘headwinds are likely to dissipate’ in the future and offered some details to bolster his stance: “Aside from selling In the broader market, we believe the drop in HEAR has two main causes: 1) The surprising weakness in the video game sector, which led to a shortfall in sales and a drop in prices. stocks in the whole industry; and, 2) A costly authorization war and unsuccessful sale attempt forced by an active investor. We believe both of these factors will ease over the next 12-18 months, pushing HEAR to at least $18.”
McGowan’s comment backs up his Buy rating on the stock and his $18 price target implies a ~97% gain over a one-year time frame. (To see McGowan’s achievements, click here)
Overall, Street analysts seem to have a more bullish view of HEAR stock than investors; This stock has had 5 recent analyst reviews, with an analysis ratio of 4 to 1 favoring Buy over Hold for a Strong Buy consensus rating. The stock is trading for $9.14, and an average price target of $11.70 represents a 28% gain from that level. (See LISTEN to stock forecasts)
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deny the responsibility: The opinions expressed in this article are those of prominent analysts only. Content is used for informational purposes only. It is very important that you do your own analysis before making any investment.
