June 8, 2022- CrowdStrike Holdings, Inc. (NASDAQ:CRWD) and First Solar, Inc. (NASDAQ:FSLR)
Learn what makes these two stocks so attractive in this market.
Two of the best stocks to buy now are CrowdStrike Holdings, Inc. (NASDAQ:CRWD) and First Solar, Inc. (NASDAQ:FSLR).
CrowdStrike is the world’s most in-demand endpoint security player. However, it unreasonably sold off recently after its Q1 earnings. Despite “fears” of annual recurring revenue (ARR), CRWD beat earnings estimates and saw Q1 revenue surge 62% year-over-year.
It also saw record bookings for its cloud services and a 100% increase in ARR for its emerging products. What happened to ARR fears?
Then there’s First Solar which is seeing some recent buzz. It’s the perfect play at the perfect time following the removal of tariffs on solar panels from several Asian markets and the invocation of the Defense Production Act to spur domestic solar panel manufacturing.
As these stocks sit as some of the best stocks to buy now, the market shows signs of resilience. Ahead of Thursday’s (June 9, 2022) labor report and Friday’s (June 10, 2022) key inflation reading, the Dow gained over 260 points, the S&P rose roughly 1.0%, and the tech-heavy Nasdaq jumped 0.9%.
Markets rose for a second straight day, and investors also shook off another gloomy retail report. Target cut its profit guidance as it reported having to slash prices to get rid of piling up inventory.
So as the markets try shaking off mounting fears, why sit out on the sidelines?
These two stocks are June 8, 2022’s best stocks to buy now and have immeasurable opportunities for several reasons.
CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Overblown ARR fears have this STRONG BUY growth play undervalued with a 34+% upside- despite crushing earnings.
One of the best stocks to buy now is CrowdStrike Holdings. This cloud services platform remains one of the most in-demand endpoint security providers and remains shockingly undervalued. It has been hit hard due to “guilt by association” in the tech sector and fell hard after its latest earnings report.
That’s despite reporting the following figures.
- Q1 revenue up 62% Y-o-Y to $1.92 billion.
- Non-GAAP earnings per share at 31 cents per share, versus the consensus 21 cents per share.
- 1620 new subscriptions, bringing total subscriptions to 17,800.
The stock only fell because of concerns about ARR (annual recurring revenue). This is despite management upgrading its top-line outlook for Q2 and the full year.
Sometimes overblown sell-offs can happen in an uncertain economic environment.
CrowdStrike has many things working in its favor that make its post-earnings dip seem overblown.
First of all, the day after its stock dipped post-earnings, it immediately reversed. Perhaps investors needed more time to digest what was unreasonable selling.
Second, companies will spend CapEx for tech-related security needs regardless of economic conditions. Better, CrowdStrike isn’t just any endpoint security platform. It’s prevalent and only expanding its market share in a booming industry. The total addressable market for the endpoint security industry is roughly $14 billion. This could balloon to $25 billion by 2028 at a 9% CAGR. In 2019, CrowdStrike was the 4th largest endpoint security firm and had a 9% market share. Today, CrowdStrike has a 15% market share and is now number 1. Crowdstrike also has one of the highest customer retention rates in the entire sector.
Moreover, reflecting on its increased market share, CrowdStrike continues expanding in Asia with strategic partnerships with Ernst & Young.
Overblown sell-off? Sure seems that way. Especially when ARR is the worry, and CrowdStrike’s management revealed record bookings for its cloud services and a 100% increase in ARR for its emerging products.
Consider this too…
CrowdStrike has only been public since 2019, and newly public companies are flailing in 2022. However, look deeper into CrowdStrike’s institutional activity. This is no ordinary baby stock.
In nine out of 12 quarters that CRWD reported earnings, institutional buying has outpaced institutional selling. Currently, institutions own 63+% of CRWD’s shares.
The fundamentals paint an even prettier picture.
CRWD holds more cash than debt on its balance sheet and boasts an outstanding 73.6% gross margin.
Further reflecting the Company’s growth, Finbox forecasts its revenue to see a 94.1% 5-year CAGR. Once again- didn’t the stock fall on ARR fears?
Its net income growth forecasts make CRWD’s growth prospects look even more enticing. According to Finbox, CrowdStrike has a
- Net income growth forecast of 223.1%.
- Net income growth forecast that may average 83.2% over the next five fiscal years.
- Median net income growth forecast of 49.0% over the next five fiscal years.
Analysts are very high on CRWD’s prospects as well.
According to Tipranks, CRWD is a STRONG BUY. This score is based on 23 out of 23 Wall Street analysts rating the stock a BUY in the last 3 months. CRWD’s 12-month price also averages $236.87, with a high forecast of $315.00 and a low forecast of $200.00. The average price target represents a 34.07% upside from June 7, 2022’s closing price of $176.68.
Beyond its post-earnings slide, CRWD also dipped almost 20% during May. But don’t let that fool you. Many analysts in the last week maintained or upgraded coverage, including
- Morgan Stanley- Upgraded EQUAL-WEIGHT to OVERWEIGHT
- DA Davidson- Maintained BUY
- Oppenheimer- Maintained OUTPERFORM
- Jefferies- Maintained BUY
- BTIG- Maintained BUY
- RBC Capital- Maintained OUTPERFORM
CRWD’s year-to-date low and high are also $242.00 and $130.00, respectively.
First Solar, Inc. (NASDAQ:FSLR)
Renewed government actions have solar stocks skyrocketing. This one could be the best to buy now with a 9.87% upside.
There’s been much buzz around solar stocks this week. The White House kicked off the second week in June with two potentially game-changing actions for the industry.
First, President Biden waived import tariffs on solar panels from Cambodia, Malaysia, Thailand, and Vietnam for two years.
Second, President Biden invoked the Defense Production Act to spur domestic solar panel manufacturing.
Will this fix gas prices? Heck no. But it’s a step toward widespread clean energy adoption. Build Back Better, and other ambitious energy plans are stalling from congressional gridlock. So the President is doing what he can to push his clean energy agenda forward.
These are just two small steps that could do wonders for stocks like First Solar.
Who exactly is First Solar?
First Solar is a prominent player in the solar energy space. It is a leader in providing solar energy solutions to lucrative markets, including the United States, Japan, France, Canada, India, and Australia.
Despite First Solar’s up and down 2022, the stock has caught fire over the last month. Since touching a low of $59.60 on May 12, 2022, it gained as much as 28.72% to its June 6, 2022 high of $76.72.
Most importantly, it’s been a long-term outperformer over the last decade, surging almost seven-fold.
Inflation, geopolitics, supply chain logjams, and recession worries have hurt solar stocks in 2022. However, these new Presidential decrees could change the tide.
Solar is set to soar, and geopolitics could actually help.
You could argue that geopolitics actually helps stocks like FSLR. The war in Ukraine is forcing the EU to wean itself off of Russian fossil fuels. There is legislation on the table to adopt renewable energy sources for roughly 50% of its power by 2030. This proposal includes requiring all new and existing energy performance D buildings to have rooftop solar installations.
Additionally, solar energy could grow at a 20% CAGR by 2026 and exceed $200 billion. The U.S. Energy Information Administration (EIA) also projects solar energy to grow the fastest of all renewable energies through 2050.
Sometimes short-term pain is worth it for long-term gains.
Although FSLR’s latest earnings report was underwhelming and reflected the broader industry’s near-term headwinds, better times could be ahead.
First Solar, for one, sees strong booking trends heading into 2023.
First Solar also holds more cash than debt on its balance sheet. Its 22.6% gross margin and 11.4% operating margin indicate profitability and operational efficiency.
Moreover, FSLR’s 1.3x price/book ratio implies that the stock could be significantly undervalued.
Analysts are largely bullish on FSLR, too.
According to Tipranks. 10 Wall Street analysts offered 12-month price targets for First Solar in the last 3 months. FSLR’s average price target is $79.11, and has a high of $98.00, and a low of $62.00. The average price target represents a 9.87% upside from June 7, 2022’s closing price of $72.00.
Most notably, Piper Sandler, last month, upgraded FSLR from NEUTRAL to OVERWEIGHT.
FSLR’s year-to-date low and high are $59.60 and $91.36, respectively.
