These stocks have a positive outlook according to top Wall Street analysts.
Despite worries about high stock market valuations in the U.S., certain stocks remain appealing due to their predicted future growth prospects.
Investors can track the recommendations of Wall Street experts to pick stocks by performing in-depth analysis to offer useful insights about a company's strengths and growth opportunities.
According to TipRanks, which ranks analysts based on their past performance, the Street's top pros favor these three stocks.
GitLab
This week, we focus on GitLab (GTLB), an AI-powered software development company that has reported strong third-quarter results for fiscal 2025 and has raised its full-year outlook due to high demand for its DevSecOps platform.
Gray Powell, a BTIG analyst, maintained a buy rating on GTLB and raised his price target from $63 to $86 after the company's Q3 revenue exceeded BTIG expectations by 4%. Additionally, operating income and earnings per share were significantly above estimates. Powell noted that the magnitude of revenue upside surprises has increased throughout the year, indicating strong demand and a favorable market position.
GitLab's solid underlying metrics, including strength in key metrics like remaining performance obligations (RPO), current RPO (CRPO) and net retention rate (NRR) and the rise in the take rates for the company's Ultimate bundle, indicate that it is well-positioned to maintain elevated growth rates in the future. Additionally, GitLab is poised to gain from additional tailwinds, including new product offerings and rising customer seat counts, with hiring trends in software expected to improve next year.
The analyst stated that GitLab's enterprise value (EV)/sales multiple of 12.0x (based on calendar year 2026 estimates) is "reasonable for a sustainable 25%+ growth story with rapidly improving operating and free cash flow margins and an upside bias to forecasts."
Among more than 9,200 analysts tracked by TipRanks, Powell ranks No. 775. His ratings have been profitable 57% of the time, delivering an average return of 10.5%. (Check out GitLab's Insider Trading Activity on TipRanks)
MongoDB
In the third quarter, MongoDB exceeded analysts' expectations due to strong demand for its Enterprise Advanced (EA) and Atlas offerings. However, the stock price dropped after the COO and CFO Michael Gordon resigned, effective January 31, 2025.
Mike Cikos, an analyst at Needham, reaffirmed his buy rating on MDB and increased the price target by 24% to $415 from $335, emphasizing that the EA offering was the main contributor to the Q3 revenue surpassal.
MongoDB's "run anywhere" strategy is expected to enable EA to continue outperforming investors' expectations, as it allows organizations to deploy applications anywhere, including devices, on-premises data centers, and the cloud.
Cikos stated that although EA was the primary contributor to the top-line beat, Daily Atlas Consumption surpassed Needham's estimates, growing at 6.4% sequentially from 5.9% in the previous quarter. Additionally, the analyst pointed out that the company's decision to reallocate mid-market investments to prioritize the Enterprise segment mirrored the actions of other software vendors in his coverage universe, reflecting their efforts to adapt to the current macroeconomic climate.
Among more than 9,200 analysts tracked by TipRanks, Cikos ranks No. 511. His ratings have been profitable 59% of the time, delivering an average return of 15.2%. (See MongoDB Stock Charts on TipRanks)
SentinelOne
An AI-powered cybersecurity company, (S), reported better-than-expected revenue for the third quarter of fiscal 2025 earlier this month. However, its loss per share widened due to higher operating expenses.
Shaul Eyal, a TD Cowen analyst, has maintained a buy rating on SentinelOne stock with a price target of $35. Eyal is confident in the company's potential to consistently challenge and capture market share in the $7 billion legacy antivirus (AV) industry.
Eyal believes that SentinelOne is one of his top ideas for 2025, and he thinks that "key ingredients are at hand to make an exciting cocktail" and drive a reacceleration in annual recurring revenue and revenue in fiscal 2026. The key drivers cited were increasing win rates, positive new logo trends, and a continuously rising share of clients' spending.
SentinelOne's partnership with PC maker Lenovo is expected to boost its branding in the medium term, though it may not have a significant impact on near-term performance. The revenue outlook for the first quarter and full year of fiscal 2026 is likely to be the next major catalyst for the stock, determining how much the company can capitalize on recent challenges faced by its rival.
Eyal is ranked No. 8 among more than 9,200 analysts on TipRanks, with a profitable rating 71% of the time and an average return of 27%. (See SentinelOne Ownership Structure on TipRanks)
Investing
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