TLDR
- Starbucks shows early signs of turnaround under new CEO Brian Niccol’s “Back to Starbucks” plan
- PayPal, with new CEO Alex Chriss, focuses on efficiency and growth initiatives, projecting 20% annual earnings growth
- SoFi Technologies has strong momentum with 34% user base growth and achieved profitability in 2024
- Strategy (MSTR), a major Bitcoin holder, has Buy ratings from all top analysts with 40.65% upside potential
- Digital accessibility platform AudioEye has strong Buy ratings with projected 81% upside
In a market still recovering from President Trump’s recent “reciprocal” tariff announcements, several stocks remain in bear market territory despite showing strong potential for long-term investors. Among these, MicroStrategy (now known as Strategy or MSTR) stands out as the top analyst pick, having completely transformed its business model to become a major corporate holder of Bitcoin.
KBW analyst Bill Papanastasiou maintained a Buy rating on Strategy with a price target of $160 per share. This optimism is shared across the board, with all six top analysts covering the stock rating it a Buy over the past three months, projecting an average upside of 40.65%.
Strategy’s pivot from business intelligence software to Bitcoin holdings represents one of the most direct ways for stock market investors to gain exposure to cryptocurrency through a publicly traded company. The firm’s bold repositioning has attracted attention from Wall Street analysts who see substantial growth potential despite recent market volatility.
Other Strong Performers
Among other stocks catching analysts’ attention is Enova International (ENVA), a fintech company providing online financial services to consumers and small businesses. JMP Securities analyst David Scharf maintained a Buy rating with a price target of $135 per share. All four top analysts covering ENVA rate it a Buy, projecting a collective upside of about 30.09%.
Digital accessibility platform AudioEye (AEYE) rounds out the top three analyst picks, despite Roth MKM analyst Richard Baldry decreasing his price target from $35 to $25 while maintaining a Buy rating. All three top analysts covering AudioEye rate it a Buy, with their targets suggesting a potential upside of 81%, the highest among the three featured stocks.
Meanwhile, several formerly high-flying stocks have experienced steep declines but may present buying opportunities for patient investors. Starbucks (SBUX) has given back most of its mid-2024 rally that occurred when Brian Niccol joined as CEO, but his “Back to Starbucks” plan is showing positive early results.
Niccol’s initiatives include a simplified menu, reduced customer wait times, and improved in-café experience. These changes appear to be resonating with consumers, as comparable store sales declined by only 4% year-over-year in the most recent quarter, compared to a 7% decline in the previous quarter.
While Starbucks trades at approximately 27 times earnings, margins are temporarily compressed due to accelerated investment in turnaround initiatives. Operating margin declined by nearly four percentage points to 11.9% in the latest quarter, but analysts suggest margins should rebound if the turnaround continues.
Tech Stock Recovery
PayPal (PYPL) has struggled with growth since the end of the COVID-19 pandemic, prompting a complete leadership overhaul starting with new CEO Alex Chriss, formerly of Intuit. The new management team has focused first on efficiency, which has boosted earnings, and is now pivoting to growth initiatives.
One promising development is PayPal’s advertising platform, launched in October under the leadership of the former head of Uber’s advertising division. Management sees major opportunities to increase monetization of Venmo, capture more of the offline payment market, and build a more cohesive ecosystem. PayPal projects 20% or greater annual earnings growth over the long term.
SoFi Technologies (SOFI) stock has declined nearly 30% from its January high but maintains strong business fundamentals. The company achieved 34% growth in user base in 2024 along with 26% revenue growth. Importantly, 2024 marked SoFi’s first full year of profitability, with management forecasting substantial earnings increases in coming years.
The average SoFi customer currently uses fewer than 1.5 products, suggesting significant cross-selling opportunities as the company strengthens customer relationships. Its recently launched third-party loan platform has also secured major capital commitments this year.
Investors should be prepared for potential turbulence in the near term due to tariff uncertainty, recession fears, and other economic headwinds. However, these stocks trading at attractive valuations merit consideration for risk-tolerant long-term investors.
For those seeking guidance on stock selection, tools like TipRanks‘ Analyst Top Stocks provide real-time lists of stocks recently rated by top-ranking analysts, who earn their five-star rankings through the accuracy and profitability of their recommendations over time.
The most recent data shows Strategy maintaining its position as the top analyst pick with its Bitcoin-focused strategy, followed by Enova International and AudioEye completing the trio of stocks with the strongest analyst consensus and highest projected upside potential.
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