Investors scrambling for safety amid the persistent market downturn have plenty of buying opportunities, analysts said this week. There’s still a bunch of stocks that are attractively valued that analysts believe have tremendous upside even amid the growing concerns the economy is barreling toward a recession induced by a 40-year high in inflation. CNBC Pro looked through recent Wall Street research to find companies that are poised to win in uncertain times. They include Planet Fitness, Pure Storage , ChargePoint, Interactive Brokers and Entegris. ChargePoint The battery charging infrastructure company is just one company that’s riding the electric vehicle boom, according to investment firm DA Davidson. Yet, in a market that has investors on edge with supply chain concerns, inflation and heavy demand, ChargePoint stands out, analyst Matt Summerville wrote. That’s not to say that the company has been totally immune to macro headwinds, though. Gross margins disappointed in the company’s most recent earnings report on June 1, he noted. Still, Summerville reiterated his buy rating and is standing by the stock. In his note, the analyst cited an array of positive catalysts for his bullish thesis including ChargePoint’s first-mover advantage and a “capital expenditure light business model.” “We maintain our belief that CHPT will reach adjusted EBITDA and FCF positivity in calendar 2024, and ultimately believe that shares offer an attractive risk/reward at current levels as we consider the overall electric vehicle charging infrastructure arena,” he wrote. Shares of ChargePoint are up 12.5% so far this month. ‘Overall, CHPT continues to operate at a very high level in an incredibly challenging environment as demand outstrips supply,” Summerville said. Planet Fitness The gym and exercise company was named a best SMID-Cap idea by investment firm Cowen earlier this week. “PLNT sits at the nexus of powerful secular shifts that will support growth, and is further fueled by its $250mm and growing ad fund, accelerating its flywheel,” analyst Max Rakhlenko wrote. Investors fail to appreciate the long-term growth opportunity and in particular younger consumers desire for health and fitness, the firm said. Rakhlenko says he’s very confident in the company’s ability to keep adding members as well as adding new gyms to the company’s portfolio. What gives Rakhlenko additional confidence is that Planet Fitness saw some of its strongest growth during the great recession of 2008 and 2009. “We expect ongoing usage and membership trend improvements over the coming quarters, including usage to return to 100% of 2019’s levels, and an increasing number of mature gyms returning to their pre-pandemic membership levels,” he said. Shares are down 23.8% this year but the stock’s valuation is quite attractive, the firm wrote. “PLNT is well positioned to succeed in both better & more challenging backdrops,” Rakhlenko added. Pure Storage The recent flurry of negative tech headlines may have some investors sweating, but the maker of flash-based data storage systems is firing on all cylinders, according to Goldman Sachs. The firm says Pure Storage is well-positioned for more upside after the company’s robust top and bottom line earnings report earlier this month. “Solid beat and raise quarter in a challenging environment,” analyst Rod Hall wrote to clients. The firm says Pure Storage continues to execute flawlessly with little impact on customers, he wrote. “At this point we see Pure’s supply management as superior to most other companies in our coverage in the IT hardware area,” he added. In addition, Hall is particularly bullish on Pure Storage’s partnership opportunity with Meta Platforms as the social media company works to build up its artificial intelligence infrastructure. “We see this Meta opportunity as a strong revenue tailwind for Pure looking forward in FY’23,” the firm said. Shares of the company are down almost 20% this year and the analyst has a Street high price target of $50 per share. “We also see ongoing strong results as an indication that Pure’s products are gaining an increasing following among enterprise and service provider customers,” Hall said. Interactive Brokers- Compass Point, Buy rating “Strong Account Growth Persists in Challenging Environment. IBKR reported May activity yesterday [June 1] which saw NNA (net new asset) growth of 42.4k representing 27% annualized growth, very strong growth in our view given the challenged market backdrop we have seen. … .In our view, IBKR continues to put up solid results in a challenging environment, and the continued strong account growth will pay dividends over the long-term.” Entegris- Stifel, Buy rating “We hosted a fireside chat session with Entegris CEO, Bertrand Loy. … .We believe secular trends in the semiconductor industry are catalysts to Entegris’ growth prospects, & we are very confident that trends like increased materials engineering & capital intensity trends for contamination control will support this outlook. … .Still Outperforming Market in Challenging Environment.” ChargePoint- DA Davidson, Buy rating “Overall, CHPT continues to operate at a very high level in an incredibly challenging environment as demand outstrips supply. … .we maintain our belief that CHPT will reach adjusted EBITDA and FCF positivity in calendar 2024, and ultimately believe that shares offer an attractive risk/reward at current levels as we consider the overall EVCI arena. … .A capital expenditure-light business model focused on attractive segments of the EV charging ecosystem.” Planet Fitness- Cowen, Outperform rating “PLNT sits at the nexus of powerful secular shifts that will support growth, and is further fueled by its $250mm and growing ad fund, accelerating its flywheel. … .We expect ongoing usage & membership trend improvements over the coming quarters, including usage to return to 100% of 2019’s levels, & an increasing number of mature gyms returning to their pre-pandemic membership levels. … .PLNT is well positioned to succeed in both better & more challenging backdrops.” Pure Storage- Goldman Sachs, Buy rating “Solid beat and raise quarter in a challenging environment. … .We see this Meta opportunity as a strong revenue tailwind for Pure looking forward in FY’23. … .We also see ongoing strong results as an indication that Pure’s products are gaining an increasing following among enterprise and service provider customers. … . At this point we see Pure’s supply management as superior to most other companies in our coverage in the IT hardware area.”
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