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September started on a rough note for the U.S. stock market, with certain economic readings showing signs of weakness.
Ignoring the near-term noise, investors looking for stock picks can consider the recommendations of top Wall Street analysts. These experts conduct research and assess the ability of a company to navigate headwinds and deliver growth over the long term.
Bearing that in mind, here are three stocks favored by the Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.
Planet Fitness
This week’s first pick is Planet Fitness (PLNT), a franchisor and operator of over 2,600 fitness centers. The company recently reported better-than-expected results for the second quarter and reiterated its full-year guidance. Management attributed the Q2 performance to the strength of the company’s asset-light franchise model.
Recently, Baird analyst Jonathan Komp reaffirmed a buy rating on PLNT stock with a price target of $92. The analyst assigned the stock a new “Bullish Fresh Pick” designation, as he is optimistic about the company’s initiatives under the new leadership and other growth drivers.
The analyst noted that management has made efforts to enhance return on invested capital for new units through higher pricing, reduced capital expenditure and extended remodel timelines. CEO Colleen Keating aims to further strengthen the company’s position by bolstering its leadership, improving members’ experience, and enhancing marketing efforts.
Aside from the new leadership, Komp cited several reasons for his bullish thesis, including Planet Fitness’ solid consumer value proposition and a high-margin franchise model that is expected to be resilient in a tough macro environment.
The analyst added that “growing cash return capacity, and range of drivers into 2025E position the stock well for a slowing growth environment.”
Komp ranks No. 266 among more than 9,000 analysts tracked by TipRanks. His ratings have been profitable 56% of the time, delivering an average return of 15.1%. (See Planet Fitness Stock Charts on TipRanks)
Ross Stores
We move to off-price retail chain Ross Stores (ROST). The retailer reported upbeat results for the second quarter, as it attracted customers with its enhanced value offerings. Ross Stores raised its full-year earnings guidance to reflect the demand for its discounted offerings and additional efficiencies.
In reaction to the strong Q2 print, TD Cowen analyst John Kernan reaffirmed a buy rating on Ross Stores stock and raised the price target to $185 from $173. The analyst expects the company’s enhanced merchandising efforts to drive upside to the guidance for the second half of the year.
Kernan highlighted that management’s initiatives to bolster Ross Stores’ value offerings and an increased mix of branded merchandise across certain categories, including ladies apparel and cosmetics, have fueled the company’s comparable sales for the past several quarters.
Kernan noted that the company’s margins and earnings are also benefiting from the merchandising efforts and cost savings across distribution, logistics and store networks. Overall, the analyst expects ROST’s operating margin to expand to more than 13% by fiscal 2028 from 11.3% in fiscal 2023.
“We believe ROST’s valuation discount to TJX is still too wide (given similar growth and ROIC profiles), which could produce upside to ROST in the near-term,” said Kernan.
Kernan ranks No. 795 among more than 9,000 analysts tracked by TipRanks. His ratings have been successful 54% of the time, delivering an average return of 7.8%. (See Ross Stores Technical Analysis on TipRanks)
SentinelOne
Finally, there is cybersecurity provider SentinelOne (S). The company reported market-beating results for the second quarter of fiscal 2025. This marked the first time that the company delivered positive net income and earnings per share on an adjusted basis. SentinelOne also raised its full-year revenue guidance, backed by robust momentum and the strength of its AI-powered Singularity Platform.
Following the results, Baird analyst Shrenik Kothari reiterated a buy rating on SentinelOne stock with a price target of $29. The analyst noted the company’s strong Q2 performance and the 32% growth in the annual recurring revenue, driven by new business and solid expansion within the existing customer base due to emerging products across cloud, data and AI.
Kothari added that despite a challenging macro backdrop, the company upgraded its full-year outlook with expectations of improved net-new ARR in the second half of the year. The upgraded outlook reflects stronger pipeline retention and better win rates, backed by notable progress in the company’s go-to-market strategy.
Commenting on the expectations of SentinelOne benefiting from the July IT outage led by rival CrowdStrike, Kothari thinks that the management is taking a “prudent” stance. Highlighting the resilience of SentinelOne’s offerings, management noted that there has been a shift in sentiment after the outage, with growing interest in the company’s platform from some of the world’s largest organizations.
“Overall, S is executing well on its transition to the new operating model and strong RPO [remaining performance obligation] growth (40% y/y) suggests durable demand and potential upside to the prudent outlook,” said Kothari.
Kothari ranks No. 233 among more than 9,000 analysts tracked by TipRanks. His ratings have been profitable 69% of the time, delivering an average return of 22.1%. (See SentinelOne Hedge Funds Trading Activity on TipRanks)
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