July 15, 2022, Expedia Group (NASDAQ:EXPE) and IVERIC bio, Inc. (NASDAQGS:ISEE)
Uncontrollable travel demand and biotech innovations have these two firms looking like the best stocks to buy now.
Hopefully, the week ends on a positive note. For now, the market’s in the midst of another multi-day losing streak. On Thursday (July 14, 2022), the Dow fell 142.62 points (0.46%), and the S&P 500 dropped 0.30%. The Nasdaq was little changed and achieved a 0.03% gain. The global economic outlook remains murky, but there is cautious optimism the market could begin looking past the pessimism. After all, stocks ended well off their lows yesterday (July 14, 2022). So, without further ado, for the rest of 2022, Expedia Group (NASDAQ:EXPE) and IVERIC bio, Inc. (NASDAQGS:ISEE) could be two of the best stocks to buy now.
Expedia Group is one of the best stocks to buy now because it’s directly leveraged to out-of-control travel demand. We’re seeing so much demand that airports such as Heathrow in London have demanded airlines stop selling summer tickets because they can’t keep up. That sums up why a recent price target from Ascendiant Capital Markets sees over a 125% upside for Expedia from July 14, 2022’s close.
Biotech innovator IVERIC bio, Inc. is another of the best stocks to buy now. If we told you that Morgan Stanley’s upgrade last week sees the stock nearly tripling with a 160+% upside, that would be enough to explain why. Its march to that upside may have already begun as the stock caught fire last month. After all, late-stage clinical trials of its drug Zimura to treat Stargardt disease, or age-related macular degeneration (AMD), look increasingly promising.
Currently, stocks carry risks but mainly trade at discounts not seen for years. These two, though, stand out specifically as possibly the best stocks to buy now.
Expedia Group (NASDAQ:EXPE)
As travel demand scorches to uncontrollable levels, this stock not only could see earnings soar 57.55%– it could have a 125% upside.
We’re mercifully in H2 2022 after a brutal first half. As investors continue digesting the economic climate, Expedia Group is one of the best stocks to buy now. With brands like Expedia, Hotels.com, Vrbo, Orbitz, and Travelocity under its belt, EXPE is a pure play on the busiest summer travel season we’ve seen in years.
That tends to happen when people have been locked away for 2+ years due to COVID restrictions.
No, the pandemic is not over. Yet travel demand is here to stay and will likely continue skyrocketing for the rest of the year and beyond. Unless you live in China or Hong Kong, it’s hard to foresee severe restrictions returning.
That’s why Expedia Group, especially trading at under $90 a share, is such an attractive opportunity.
Jaw-Dropping Prospects For Earnings Growth
Expedia announced Q1 earnings on May 3, 2022, and displayed a strong recovery from the year prior.
- Adjusted loss of -$0.47 a share marked a 329.79% improvement from Q1 2021’s quarterly loss of -$2.02 per share.
- Revenues came in at $2.25 billion, an 81% year-over-year increase.
- Gross bookings came in at $24.4 billion and increased 58% year over year and 39.8% quarter over quarter.
Expedia won’t report its Q2 figures for a few weeks now. However, its prospects are undoubtedly improving in the short-term and long-term as travelers look to make up for lost time. That’s why MarketBeat forecasts earnings for Expedia Group to grow by 57.55% in the coming year. That’s why Finbox projects its net income to grow 524.9% and average 119.0% over the next five fiscal years.
Fundamentally Sound and Deeply Undervalued
We could talk for hours about how deeply undervalued Expedia is based on its valuation multiples and rock-solid fundamentals.
But let’s start with the stock itself first.
Year-to-date, the stock has shed more than half its value and has declined -by 58.92%. It also currently trades near its 52-week lows and has a nearly-oversold RSI.
This is criminal considering the worldwide travel demand and the outstanding fundamentals Expedia boasts.
First, its 7 out of 9 Piotroski Score indicates it has healthy Liquid Balance Sheets, Profitability, and Operating Efficiency.
A deeper dive into several of its margins add further context to this, including its 13.1% ROCE and 83.5% gross margin. This shows the Company can generate a solid return from its equity and that its net profits take up a big chunk of its revenue.
The chart and its fundamentals alone describe how undervalued this stock is. However, beyond this, its valuation also implies an outstanding 27.8% free cash flow yield.
Furthermore, while its trailing P/E remains relatively high, its 12.6x forward P/E indicates that its earnings will eventually catch up. This, in a nutshell, makes the stock look even more attractive in the long term.
Recent Analyst Activity Sees 125+% of Upside
Recent analyst activity points to a substantial upside for the EXPE stock.
Most notably, on June 20, 2022, Ascendiant Capital Markets set a $202.00 price target, representing a 125.9% upside from July 14, 2022’s $89.42 close.
While Truist’s BUY rating and $185.00 price target from July 7, 2022, don’t foresee the same kind of upside, forecasting 106.89% of room to run is nothing to scoff at.
TipRanks notes that 23 Wall Street analysts offered 12-month price targets for Expedia in the last 3 months. The stock has a street-high price target of $275.00, a low forecast of $115.00, and an average of $176.38. The average price target represents a 97.23% upside from EXPE’s July 15, 2022, closing price of $89.42.
EXPE’s year-to-date low and high are $88.70 and $217.72, respectively.
IVERIC bio, Inc. (NASDAQGS:ISEE)
Morgan Stanley is so encouraged by this biotech innovator that it sees the stock nearly tripling with a 160+% upside.
2022 has been an ugly year for speculative biotech plays, and INVERIC bio has been no exception. At its lowest, the ISEE stock plunged -by 54.24%, from $19.34 in April to $8.85 in June.
While the stock largely trod water for a few weeks after touching this low, its fortunes in July have dramatically changed. Between July 5-14, the stock rocketed 28.49%.
Based on its clinical progress, this may only be the beginning.
Clinical Progress Points to Lucrative Potential
We all know what happens when little-known biotech stocks have a favorable treatment. They tend to soar to the moon. Yes, biotech stocks are more like gambling than other stocks. You can either hit a home run or strikeout. But with the clinical progress of ISEE’s lead drug candidate, Zimura, looking increasingly encouraging, this stock looks like a grand slam.
That alone is why ISEE is one of the best stocks to buy now.
Typically, when it comes to stock research, you want fundamentals, dividends, or some form of stability. While this Company does hold more cash than debt on its balance sheet, frankly, the margins and whatnot can be thrown out the window based on the late-stage progress we’re seeing.
Zimura is currently undergoing late-stage trials in the treatment of Stargardt disease, or age-related macular degeneration (AMD).
Consider this for context on a potentially lucrative opportunity for ISEE. The Global Stargardt Disease Therapeutics Market is estimated to have a $213.5 million market value. It could skyrocket with a CAGR of 31.7 % by 2028.
ISEE recently released a post-hoc data analysis from Zimura’s phase 3 GATHER1 study. The results were very encouraging and included a 22% reduction in progressive damage 18 months after treatment with Zimura.
This data from GATHER1 was used to justify the in-progress Phase 3 GATHER2 study in which top-line results are expected this quarter.
While there are clinical trials of Zimura in the pipeline over the next few quarters, Morgan Stanley analyst Michael Ulz has seen what he needs to see. He’s increased the probability of success for Zimura from 65% to 75%.
Perhaps that’s why….
Morgan Stanley Upgraded the Stock Last Week and Sees a 160+% Upside
More and more analysts are getting on the Iveric bandwagon. Ulz and Morgan Stanley were the most recent to upgrade the stock on July 7, 2022. He gave the stock an OVERWEIGHT rating and boosted his price target from $25 to $30. This represents a 160.42% upside from July 14, 2022’s $11.52 close.
This is only the icing on the cake of recent analyst activity since May.
- Guggenheim initiated a BUY rating with a $30.00 price target
- Bank of America initiated a BUY rating with an $18.00 price target
- Credit Suisse Group boosted its price target to $24.00
- Stifel Nicolaus boosted its price target from $22.00 to $28.00
TipRanks sees ISEE as one of the best stocks to buy now and a STRONG BUY. Of 8 Wall Street analysts offering 12-month price targets in the last 3 months, 7 rate it a BUY compared to just 1 a HOLD and 0 a SELL. $30.00 is ISEE’s street-high price target, compared to a low of $12.00 and an average of $24.13. Its average price target represents a 109.83% upside from July 14, 2022’s close.
ISEE’s year-to-date low and high are $8.85 and $19.34, respectively.