In the realm of the U.S. stock market, September got off to a rocky start, showcasing some indicators of economic weakness. However, amid the short-term fluctuations, investors on the lookout for potential stock picks can turn to the insights provided by top Wall Street analysts. These experts delve into deep research to evaluate a company’s ability to navigate challenges and spur growth in the long run. According to TipRanks, a platform that ranks analysts based on their past performances, here are three stocks that are highly favored by the industry’s top professionals. One of the key recommendations for this week is Planet Fitness (PLNT), a company that acts as a franchisor and operator for over 2,600 fitness centers. In the recent past, the company showcased better-than-expected results for the second quarter and maintained its full-year guidance. The company’s success in Q2 was attributed to the robustness of its asset-light franchise model. Jonathan Komp, an analyst at Baird, continued his buy rating on PLNT stock, setting a price target of $92. Notably, Komp introduced a “Bullish Fresh Pick” designation for the stock, indicating his positive outlook on the company’s endeavors under new leadership and other growth factors. The CEO, Colleen Keating, is striving to bolster the company’s position by empowering its leadership, enhancing members’ experience, and boosting marketing efforts. Besides the change in leadership, Komp highlighted several reasons for his optimistic stance, including Planet Fitness’ strong consumer value proposition and a high-margin franchise model that is expected to withstand macroeconomic challenges. Komp’s positive sentiments stem from the company’s growing cash return capacity and a host of drivers lining up for a successful position into 2025. With a rank of 266 among the 9,000 analysts tracked by TipRanks, Komp has had profitable ratings 56% of the time, raking in an average return of 15.1%.
Another notable stock recommendation from Wall Street analysts is Ross Stores (ROST), an off-price retail chain. Ross Stores posted impressive results for the second quarter, drawing in customers with its enhanced value offerings. The company raised its guidance for full-year earnings to mirror the strong demand for discounted products and additional efficiencies. In response to the stellar Q2 performance, John Kernan, an analyst at TD Cowen, maintained a buy rating on Ross Stores stock and bumped up the price target to $185 from $173. Kernan anticipates that the company’s efforts in merchandising will catapult its performance in the second half of the year. Management’s strategies to fortify Ross Stores’ value propositions and broaden the range of branded products in various categories have powered the company’s comparable sales over recent quarters. These initiatives have not only boosted sales but also bolstered margins and earnings, attributable to savings across distribution, logistics, and store networks. Kernan envisions the company’s operating margin to expand beyond 13% by fiscal 2028 from the current 11.3% in fiscal 2023. Kernan believes that Ross Stores is undervalued in comparison to TJX, presenting an opportunity for upward momentum in the near term. Standing at No. 795 among the 9,000 analysts tracked by TipRanks, Kernan has had successful ratings 54% of the time, yielding an average return of 7.8%.
The third stock pick that shines bright according to Wall Street analysts is cybersecurity provider SentinelOne (S). The company showcased extraordinary results for the second quarter of fiscal 2025, marking the first instance of positive net income and adjusted earnings per share. SentinelOne augmented its revenue guidance for the full year, driven by robust momentum and the prowess of its AI-driven Singularity Platform. Baird analyst Shrenik Kothari reiterated a buy rating on SentinelOne stock with a target price of $29, following the impressive Q2 performance. Kothari emphasized the company’s robust growth in annual recurring revenue, soaring by 32%, facilitated by new business ventures and strong expansions within the existing customer base across cloud, data, and AI. Despite the challenging macroeconomic backdrop, the company adjusted its full-year outlook and expects enhanced net-new ARR in the latter half of the year. The firm’s upgraded projections are underpinned by advancements in pipeline retention and improved win rates, driven by noteworthy progress in the company’s go-to-market strategy. Reflecting on the potential benefits that SentinelOne could reap from the July IT outage initiated by rival CrowdStrike, Kothari commended the management’s prudent approach. The durability of SentinelOne’s offerings was underscored by the management’s observation of a shift in sentiment post the outage, with heightened interest in the company’s platform from major organizations globally. Kothari’s assessment states that SentinelOne is executing the transition to a new operating model deftly, with strong RPO growth (40% year-on-year) indicating sustained demand and potential upside against the judicious outlook. Ranked at 233 among the 9,000 analysts on the TipRanks leaderboard, Kothari has had profitable ratings 69% of the time, registering an average return of 22.1%.