Worrisome economic data, weak consumer sentiment and tariff fears contributed to a rocky ride for stocks in February, with the S&P 500 losing 1.4% during the month.
Investors should pick stocks of companies that can withstand these short-term pressures and capture growth opportunities to deliver attractive returns over the long term. To this end, recommendations of top Wall Street analysts are helpful, as they are based on in-depth analysis of a company’s strengths, challenges and growth prospects.
With that in mind, here are three stocks favored by the Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.
Booking Holdings
First up is Booking Holdings (BKNG), one of the leading online travel agents. The company delivered market-crushing fourth-quarter results, thanks to strong travel demand. Booking Holdings is investing in its business to drive long-term growth through several initiatives, including deploying generative artificial intelligence technology to enhance the value it provides to travelers and its partners.
In reaction to the stellar results, Evercore analyst Mark Mahaney reiterated a buy rating on BKNG stock and boosted the price target to $5,500 from $5,300. The analyst noted that the company’s solid Q4 beat was driven by strength across all geographic markets and travel verticals. He also highlighted that BKNG’s fundamentals improved across the board, with key metrics like bookings, revenue and room nights growth accelerating in the quarter.
In fact, Mahaney pointed out that despite being more than two-times bigger than Airbnb and three-times bigger than Expedia in terms of room nights, BKNG’s bookings, revenue and room nights grew faster than these two rivals in Q4 2024. Given its massive scale, superior growth, very high margin, and a highly experienced management team, the analyst considers BKNG to be the highest quality online travel stock.
“And we continue to view BKNG as reasonably priced, with sustainable & premium EPS growth (15%), substantial FCF [free cash flow] generation, and a clear track record of execution,” said Mahaney.
Overall, Mahaney is confident that BKNG can maintain its long-term target of 8% growth in bookings and revenue and 15% growth in EPS. He is also encouraged by BKNG’s multi-year strategic investments in merchandising, flights, payments, connected trips and generative AI as well as the growing traffic to the company’s site.
Mahaney ranks No. 26 among more than 9,400 analysts tracked by TipRanks. His ratings have been profitable 61% of the time, delivering an average return of 27.3%. See Booking Holdings Stock Charts on TipRanks.
Visa
The second stock pick is payments processing giant Visa (V). At the investor day event held on Feb. 20, the company discussed its growth strategy and the revenue opportunity in its Value Added Services (VAS) and other businesses.
Following the event, BMO Capital analyst Rufus Hone reaffirmed a buy rating on Visa stock with a price target of $370. The analyst stated that the event helped address many investor concerns like the remaining runway in Consumer Payments and the company’s ability to sustain a high-teens growth in VAS.
The analyst highlighted management’s commentary about the significant remaining runway in Consumer Payments. Specifically, the company estimates a $41 trillion volume opportunity in Consumer Payments, of which $23 trillion is currently underserved by the existing payment infrastructure.
Commenting on the VAS business, Hone noted that the company offered significant insights into its VAS business. Notably, Visa projects longer-term revenue growth in the range of 9% to 12% and expects a continued shift in its revenue mix into the faster-growing Commercial & Money Movement Solutions (CMS) and VAS businesses, which will offset the expected moderation in Consumer Payments growth. Visa expects CMS and VAS to contribute more than 50% of its total revenue over time, compared to roughly one-third in FY24.
Finally, Hone views Visa stock as a core holding within the U.S. financial space. “We continue to believe Visa will sustain double-digit top-line growth for the foreseeable future (consensus ~10% growth),” concluded the analyst.
Hone ranks No. 543 among more than 9,400 analysts tracked by TipRanks. His ratings have been successful 76% of the time, delivering an average return of 16.7%. See Visa Hedge Fund Activity on TipRanks.
CyberArk Software
The third stock on this week’s list is CyberArk Software (CYBR). The company recently announced solid Q4 2024 results, reflecting strong demand for its identity security solutions. On Feb. 24, the company held its investor day event to discuss its performance and growth prospects.
Following the investor day, Baird analyst Shrenik Kothari reiterated a buy rating on CYBR stock and increased the price target to $465 from $455. The analyst stated that the event reinforced the company’s dominance in the cybersecurity space. Specifically, CyberArk now sees a total addressable market (TAM) of $80 billion, reflecting a notable jump from the previous estimate of $60 billion.
Kothari explained that the expansion in CyberArk’s TAM is driven by the demand for machine-identity solutions, AI-driven security, and modern Identity Governance and Administration (IGA) solutions. The analyst noted that the 45 times surge in machine identities compared to human identities has created a huge security gap, which CyberArk is well-positioned to capture through its Venafi acquisition.
Moreover, the company’s Zilla Security acquisition is helping in addressing the need for modern IGA solutions. Coming to AI-driven security needs, Kothari highlighted CyberArk’s innovation, especially the launch of CORA AI.
Kothari added that management is targeting annual recurring revenue of $2.3 billion and a free cash flow margin of 27% by 2028, backed by platform consolidation trends. “Deep enterprise pipeline/adoption, execution discipline should sustain CYBR’s long-term growth trajectory, in our view,” the analyst said.
Kothari ranks No. 78 among more than 9,400 analysts tracked by TipRanks. His ratings have been profitable 74% of the time, delivering an average return of 27.7%. See CyberArk Software Ownership Structure on TipRanks.
