🤖📈 Why Yelp's Stock Could Increase by 94%
Plus 62% returns on TSLA in 2 months, a dividend king with 4% dividends, and much more ...
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Our AI read and summarized 175 articles today from all over the internet to find the best trade ideas to help you make more money in the stock market.
What you’ll find in this email:
🚗 62% returns on TSLA in 2 months
💰 A dividend king with a 4.3% yield
🐻 The bearish v bullish case for TSLA
📱 Morningstar analyst gives Bilibili 140% upside potential
🤖📈🚗📱 Much more…
💰 Top 3 Trade Ideas Today
The three best trade ideas our AI tool found today. Make sure to vote on your favorite!
🥇 Yelp: Activist Pressure Might Lead To A Company Sale
Ticker: $YELP | Current Price: $36 | Price Target: $70 (+94%)
📱Internet Tech | 🤝 Acquisitions |🚨 Event Driven | ✏️ Blog Post | 📈 Long Idea
TCS Capital Management, an activist investor owning 4% of Yelp, is pressuring the company to explore strategic alternatives, including a potential sale to a strategic or financial acquirer. TCS Capital expects Yelp to fetch over $70/share in a potential sale, implying a 90%+ upside from current share price levels. Yelp's solid fundamentals, including high margins, strong growth, and solid balance sheet, support TCS Capital's valuation of the business at 12x 2024E EBITDA. Yelp might explore a merger with Angi, which would create a dominant player in the US home services market and lead to significant cost and revenue synergies. Yelp presents an interesting value play with a likely near-term catalyst, as activist TCS Capital has the potential to drive a company sale or reverse merger. The downside seems fairly well protected given the company's cheapness and strong business fundamentals.
🥈 Innoviz: Deep Dive Into LiDAR Leader Of The Future
Ticker: $INVZ | Current Price: $3 | Price Target: $N/A
🚗 Autonomous Vehicle | 📡 LiDAR | 💻 Software | ✏️ Blog Post | 📈 Long Idea
The article discusses Innoviz, a leading player in the LiDAR industry for autonomous driving. Innoviz has the largest order book in the industry and is expected to have scale and cost leadership advantages. The LiDAR industry is expected to consolidate among two to three players, and Innoviz has a structural advantage with integrations with the top three autonomy platform players. Innoviz's unique perception software presents a huge opportunity for higher margin and recurring software revenues, and there are opportunities for cross-selling with the recently launched software product. Innoviz has a strong product portfolio with a focus on technology and continued innovation, relationships with leading OEMs, and solid intellectual property portfolio and software solutions, which will differentiate it from its competitors and help it win market share in the space. Innoviz has a structural advantage over peers in terms of seamless integration of hardware with software. Innoviz announced a new software product offering in its 1Q23 quarter, including the industry's first LiDAR-based minimum risk maneuver (MRM) system. Innoviz announced a new light commercial vehicle program with an accelerated timeline and expects it to contribute to revenues in the second half of 2023. The significant pre-production revenues and cash it will be receiving in the next two to three years will be key to providing the company the funding it needs for the next few years.
🥉 Zions Bancorporation: Focus On The Valuation, Not The News
Ticker: $ZION | Current Price: $28.27 | Price Target: $45 (+59%)
🏦 Banking | 🏷️ Undervalued | ✏️ Blog Post | 📈 Long Idea
The author of the article applies a value investing approach to Zions, estimating a fair value of $50 based on near-term EPS of $5 and a 10 P/E ratio. Despite the current stock price being at $28, the author sees an 80% upside and recommends buying the stock. The article acknowledges the bad news surrounding Zions, including negative marks-to-market on securities and loan portfolios, uninsured deposit flight, potential capital requirement increases, rising deposit costs, and office loan defaults. However, the author considers the impact of this bad news on Zions' fair value and estimates a new fair value of $46, still suggesting a 65% upside and recommending buying the stock. The article discusses the potential risks and downsides but concludes that Zions' bad news should have largely faded in two years, and the author has a $45 target price on the $28 stock, recommending readers to buy it.
🐻 Bearish v 🐂 Bullish
Company: Tesla Inc ($TSLA)
Bullish Reasons:
Technological Leadership: Tesla's proprietary technology contributes to its intangible asset-driven competitive advantage. The company invests nearly 6% of sales in R&D to maintain its best-in-class range, which is well ahead of the competition on a miles per kilowatt-hour basis and continues to improve other vehicle specs such as power. Tesla is also investing heavily in its proprietary autonomous vehicle technology and building one of the world’s largest supercomputers to train self-driving artificial intelligence
Strong Brand and Premium Pricing: Tesla’s strong brand cachet as a luxury automaker commands premium pricing, while its EV manufacturing expertise allows the company to make its vehicles cheaper than its competitors. The company's strong brand will continue to generate consumer demand as new vehicles are launched, such as the Cybertruck or the platform that will produce the affordable sedan and SUV
Investing in the Future: Tesla is investing heavily in future plans, which include the Cybertruck next-generation platform, in-house cell production, energy storage business, and autonomy and AI-enabled products. They plan to do this while keeping the business financially healthy and industry-leading
Bearish Reasons:
Increased Competition: Traditional automakers and new entrants are investing heavily in EV development, which will result in Tesla seeing a deceleration in sales growth and being forced to cut prices due to increased competition, eroding profit margins
Uncertain Future Investments: Tesla's ambitious plans for future growth, including the Cybertruck next-generation platform, in-house cell production, energy storage business, and autonomy and AI-enabled products, require significant investment. If these plans do not proceed as expected, or if there are unforeseen challenges or delays, this could negatively impact the company's financial performance
International Risks/Dependencies: Tesla has acknowledged that they face significant risks related to its international operations, including unfavorable regulatory, political, tax and labor conditions, which could adversely affect their business and operating results
📈 More Trade Ideas
AbbVie: A Pharmaceutical Powerhouse and Dividend King
Ticker: $ABBV | Price: $138 | Price Target: N/A
🩺 Healthcare | 🧪 Pharmaceutical | 💰 Dividend | ✏️ Blog Post | 📈 Long Idea
AbbVie is a leader in the biopharmaceutical industry with a diverse product portfolio and strategic R&D investments. The company has a median ROIC of 14.5% over the past decade and a hefty dividend yield, demonstrating financial strength. AbbVie's recent FDA approval for Linzess helps propel its expansion in the gastrointestinal therapeutic arena, addressing numerous IBS-C and CIC symptoms and opening a significant market for the company. Despite biosimilar competition for Humira, AbbVie's 2023 Q1 earnings show strong performance, and the company believes its sales will stabilize by the end of 2024. AbbVie's commitment to strategic investments in R&D could potentially foster new breakthrough therapies, catalyzing the company's growth in the upcoming years, considering its robust pipeline. AbbVie's market cap of over $244 billion highlights its position as a well-established company, and its revenue has grown consistently at a CAGR of over 15% over the last 5 years. AbbVie is a dividend king, with an outstanding yield of over 4%, and investors can be confident that this high dividend is sustainable and only likely to increase going forward. Despite risks such as the evolving regulatory environment and the possibility of lawsuits related to product liability, AbbVie's impressive financials, strong dividend yield, and strategic long-term growth approach make it a compelling investment.
Bilibili Inc.: Bilibili's Video Platform Seeing Rapid Growth in Users; but Monetization Is Key to Long-Term Success
Ticker: $BILI | Price: $16 | Price Target: $38.20 (+140%)
🇨🇳 China | 🎥 Entertainment/Media | 📱 Tech | 📝 Research Report | 📈 Long Idea
Bilibili generates revenue through various means, with advertising being the most important for long-term success. The company's video sharing site has a superior business model compared to most other video streaming companies, focusing on user-generated content instead of investing heavily in original content or paying huge up-front content licenses. Bilibili has created a self-maintainable UGC ecosystem that allows the firm to acquire video content at significantly lower costs than traditional streaming players. However, the company faces potential competition from behemoths such as Tencent and ByteDance. Bilibili is viewed as a no-moat company, but benefits from network effects and intangible assets. The company is expected to achieve a compound annual growth rate of 23% over the next five years, with strong top-line growth. The greatest risk for Bilibili is competition from larger long-video platforms like Tencent and ByteDance. ESG risks exist around data privacy and security. The company's balance sheet is healthy, but additional financing may be needed before cash flow breakeven in 2026.
Marqeta, Inc.: Marqeta Offers Impressive Growth, but Its Reliance on Block Is a Serious Concern
Ticker: $MQ | Current Price: $5 | Price Target: $10 (+100%)
📱 Fintech | 🏦 Payment Processing | 📝 Research Report | 📈 Long Idea
Marqeta is a fast-growing company that provides a platform and APIs for card issuance, but its revenue is heavily concentrated with Block accounting for 76% of net revenue in Q1 2023. The company's expansion into credit cards and international payments is still in early stages, and there is uncertainty regarding its competitive position. Marqeta lacks an economic moat due to its lack of profitability and concentration risk. The company is heavily exposed to Block, buy-now-pay-later firms, and food/delivery services, with 73% of its net revenue in H1 2021 coming from Block. Marqeta is still unprofitable and needs additional volume to scale against its competitors. The fair value estimate for Marqeta is $10, assuming a 9% cost of equity, and is sensitive to processing volume growth projections and the amount of interchange revenue shared with Marqeta's customers. Despite margin compression occurring in 2023, Marqeta's long-term growth drivers include its exposure to high-growth firms like Block, international expansion, and move into credit card issuance. Revenue is projected to grow at a 20.7% CAGR from 2022 to 2027. Marqeta's business model requires little physical or working capital, and the company's balance sheet is strong, with no long-term debt and limited cash burn. Marqeta does not pay a dividend or buyback a meaningful number of shares, as preserving capital to invest in the business is the priority for the foreseeable future.
Under Armour, Inc.: Maintaining BUY
Ticker: $UAA | Current Price: $7.68 | Price Target: $15 (+95%)
👕 Apparel | 🛍️ Consumer Retail | 📝 Research Report | 📈 Long Idea
Under Armour is focusing on high-end products and reducing sales to off-price retailers while boosting revenue in its own direct-to-consumer channels. The company has improved results by managing inventory, focusing on premium products, and boosting direct-to-consumer sales. Under Armour has also strengthened marketing and implemented a restructuring program to lower costs. The company has focused on younger athletes and launched a new casual clothing line, and plans to offer more premium products, broaden its assortment of women's apparel, and expand its footwear selection. Under Armour's inventory and retail position is healthier than it has been in years, and it is expected to benefit from its strong brand recognition. However, investors face risks due to the highly competitive nature of the business and the discretionary nature of its products, as well as competition from well-established competitors like Nike, Adidas, and The North Face. Under Armour's financial strength rating has been lowered, and its FY24 guidance expects reported revenue to be flat to up slightly. Despite this, UAA shares appear undervalued at current prices near $8, with a target price of $15.
PayPal: Solid Financials, Reasonable Valuation and A Great Opportunity For Income Return
Ticker: $PYPL | Current Price: $68.18 | Price Target: $105.40 (+55%)
📱 Fintech | 🏦 Payment Processing | 🏷️ Undervalued | ✏️ Blog Post | 📈 Long Idea
Bullish arguments for PayPal include attractive valuations, a strong balance sheet, and a leading market share position. The company's issues can be fixed due to its retention of its user base and solid financial health. PayPal's total payment volumes have grown consistently, and the company is focusing on increasing engagement on its current active accounts. The author sees upside potential in PayPal's stock due to its low forward P/E ratios and attractively priced enterprise value to EBITDA metric. However, there is overhead resistance at the $70-$80 range, and the author suggests using options to maximize income return while waiting for clarity on management and their strategy. \n\nBearish arguments highlight the heavily fragmented payment industry, making it difficult for PayPal to maintain a sustainable moat and lead to excess profits. The company is struggling to create brand loyalty from its customers through acquisitions or partnerships. Poor management decisions and wasted capital could lead to long-term decline and make PayPal a value trap. Margins are contracting while competitors stabilize or increase, and Apple and Google Pay pose a significant threat to PayPal's market share.
Tyson Foods: Attractive Valuation On Strong Fundamentals And Insider Buying
Ticker: $TSN | Current Price: $49.91 | Price Target: $100 (+100%)
🍗 Food and Beverage | 🍞 Consumer Staples | ✏️ Blog Post | 📈 Long Idea
Tyson Foods is the largest U.S. producer of processed chicken, beef, pork, and protein-based products. The company is currently trading at an attractive valuation of 7.45x EV/EBITDA and is facing headwinds such as commodity price volatility and low consumption due to high prices. However, the author believes Tyson Foods can come out stronger on the other end. Tyson Foods' revenue has grown at a CAGR of 3.7% over the past five years, while its EBITDA has grown at a CAGR of 6.5%. The global population is expected to grow, which will drive demand for food products, and meat consumption is also expected to increase. Tyson Foods has a strong balance sheet, a dividend yield of 2.4%, and a price target of $100, which represents a potential upside of 22% from its current price. The author predicts a decline in beef and pork revenue by 1% in 2023 before resuming growth, while chicken demand is expected to remain strong. Prepaid and international revenue is expected to grow, resulting in total revenue growth of 3% from 2023 to 2027. The author concludes that Tyson Foods is undervalued and a good investment opportunity, with a solid track record and potential for growth.