Since last year, meme stocks have hit the headlines on several occasions due to their massive, short-squeeze-driven returns. Investors’ discussions on forums such as Reddit’s WallStreetBets (WSB), and collective bets against short-selling hedge funds, have helped many of these stocks skyrocket.
The WallStreetBets forum garnered attention worldwide after triggering the rallies of GameStop Corp. (GME) and AMC Entertainment Holdings, Inc. (AMC). And although the platform is known for betting on heavily shorted companies, it also discusses companies with sound fundamentals and good growth prospects.
Roku, Inc. (ROKU), SoFi Technologies, Inc. (SOFI), Peloton Interactive, Inc. (PTON), and ContextLogic Inc. (WISH) are frequently discussed on the forum, and Wall Street analysts expect them to gain more than 60% in the near term.
Roku, Inc. (ROKU)
ROKU in San Jose, Calif., operates a television streaming platform. Its streaming players and television-related audio devices are available across the United States through direct retail sales and licensing arrangements with service operators. The company enables customers to discover and access various streaming content and content publishers to reach its user base of active accounts. It has had six mentions in the WSB over the past 24 hours.
On Sept. 6, 2021, ROKU announced that it would launch its streaming players in Germany later this year. This will be its second big European rollout after the U.K., as it seeks to capitalize on the pandemic-driven consumer shift towards watching more video on demand. According to Arthur Van Rest, the executive leading ROKU’s international expansion, “TV and the way that it’s being consumed are shifting dramatically–and we are right at the heart of that.”
ROKU’s net revenue for its fiscal third quarter, ended Sept. 30, 2021, increased 50.5% year-over-year to $680 million. The company’s gross profit increased 69% year-over-year to $363.90 million. Its Average Revenue Per User (ARPU) increased 49% year-over-year to $40.10 on a trailing 12-month basis. Also, its adjusted EBITDA increased 132% year-over-year to $130.10 million.
Analysts expect ROKU’s EPS and revenue for its fiscal 2021 to increase 1,242.9% and 57%, respectively, year-over-year to $1.60 and $2.79 billion. It surpassed the Street’s EPS estimates in each of the trailing four quarters. Over the past six months, the stock has declined 61.7% in price to close the last trading session at $164.05. However, Wall Street analysts expect the stock to hit $323.76 in the near term, indicating a potential 97.3% upside.
SoFi Technologies, Inc. (SOFI)
San Francisco-based digital financial services company SOFI operates through lending, financial services, and technology platform segments. Its lending segment offers student, personal, and home loans. In contrast, the financial services segment provides cash management and investment services. Its technology platform segment provides the benefits of Galileo and Apex. It has been mentioned 71 times in the WSB over the past 24 hours.
On Jan. 18, 2022, SOFI announced its applications to become a bank holding company through its proposed acquisition of Golden Pacific Bancorp, Inc. and to operate its bank subsidiary as SoFi Bank, National Association. Anthony Noto, SOFI’s CIO, said,” This incredible milestone elevates our ability to help even more people get their money right and realize their ambitions.”
SOFI’s net revenues increased 35% year-over-year to $272 million in the third quarter, ended Sept. 30, 2021. The company’s members increased 96% year-over-year to 2.93 million. Its total products increased 107.8% year-over-year to 4.26 million. In addition, its net interest income increased 47% year-over-year to $72.37 million.
For its fiscal year 2022, SOFI’s EPS and revenue are expected to increase 71.1% and 45.7%, respectively, year-over-year to $0.33 and $1.46 billion. Over the past year, the stock has declined 50.3% in price to close the last trading session at $12.48. However, Wall Street analysts expect the stock to hit $20.30 in the near term, indicating a potential 62.6% upside.
Peloton Interactive, Inc. (PTON)
PTON in New York City provides a connected, technology-enabled interactive fitness platform. The company offers services like instructor-led boutique classes for its customers. Also, its product portfolio includes Peloton Bike, Peloton Bike+, Tread and Tread+, bike mat, heart rate monitor, and dumbbells. It has had 33 mentions in the WSB over the past 24 hours.
On Nov. 9, 2021, PTON announced its first connected strength product–the Peloton Guide. The Guide is an AI-enabled device that provides members instant access to a suite of expert instructors and other PTON content libraries over the television. PTON’s Co-Founder and Chief Product Officer Tom Cortese said, “Peloton Guide demystifies strength training to create a more engaging experience that will help members stay motivated.”
PTON’s total revenue for the first quarter, ended Sept. 30, 2021, increased 6.2% year-over-year to $805.20 million. The company’s connected fitness subscription increased 87% year-over-year to 2.49 million, while its connected fitness subscription workouts came in at 120.50 million, representing a 55% increase year-over-year.
Analysts expect PTON’s EPS and revenue for its fiscal 2023 to increase 63.8% and 18.4%, respectively, year-over-year to $1.05 and $5.05 billion. Over the past year, the stock has declined 81.3% in price to close the last trading session at $27.33. However, Wall Street analysts expect the stock to hit $50.87 in the near term, indicating a potential 86.1% upside.
ContextLogic Inc. (WISH)
WISH is a mobile electronic commerce company that provides a discovery-based shopping platform that connects merchants’ products to users based on user preferences. The San Francisco-based company provides the merchants with a suite of services, including demand generation and engagement, user-generated content creation, data intelligence, and business operations support. It has been mentioned 99 times in the WSBs over the past 24 hours.
On Nov. 9, 2021, WISH announced the launch of the Wish Standards program to incentivize the delivery of quality products and other positive behaviors from its merchants to improve user trust and increase customer retention. WISH’s Chief Technology Officer Farhang Kassaei said, “Our ultimate goal is to align our merchants’ success with that of an enhanced user experience. In doing so, we hope to improve user trust and demonstrate our longer-term commitment to product quality.”
WISH’s revenue for nine months ended Sept. 30, 2021, increased 3% year-over-year to $1.79 billion. The company’s logistics revenue increased 101% year-over-year to $621 million. Also, its net loss declined 38.7% year-over-year to $64 million.
WISH’s EPS for the quarter ending Dec. 31, 2021, is expected to increase 97% year-over-year to $0.09. Over the past year, the stock has declined 91.1% in price to close the last trading session at $2.65. However, Wall Street analysts expect the stock to hit $4.70 in the near term, indicating a potential 77.3% upside.
ROKU shares rose $2.95 (+1.80%) in premarket trading Tuesday. Year-to-date, ROKU has declined -28.11%, versus a -5.27% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.4 Meme Stocks That Will Rally 60% or More, According to Wall Street appeared first on StockNews.com