Oppenheimer Says There's Room for Over 50% Gains in These 3 Stocks

There is an old Chinese curse that says “May he live in interesting times.” Like it or not, we live in interesting times. COVID is receding but not gone, and Read More... The post Oppenheimer Says There's Room for Over 50% Gains in These 3 Stocks appeared first on TipRanks Financial Blog.

Oppenheimer Says There's Room for Over 50% Gains in These 3 Stocks

There is an old Chinese curse that says “May he live in interesting times.” Like it or not, we live in interesting times. COVID is receding but not gone, and while markets have rebounded well from the crisis (the S&P 500 is up 19% so far this year), the general economy is showing some worrisome signs. Jobs creation slowed in August, and employers reported over 11 million unfilled positions – but unemployment, while ticking down, remains above 5%. More ominously, in an indication that supply chains and distribution networks have not recovered from the pandemic disruptions, a record 65+ container ships are stuck off the Port of Long Beach waiting to unload.

So what to make of these conflicting signals? Should investors steer clear of the market, or dive in headfirst? Watching the scene from Oppenheimer, chief investment strategist John Stoltzfus believes that the current environment resembles past crises that have come and gone, leaving in their wake winners among the bulls.

“Whenever the luxury of hindsight for present times (i.e. the Pandemic Crisis) finally arrives investors may come to realize that indeed historical precedence shows that times of crisis, if successfully managed and navigated by monetary policy makers, businesses, and consumers, can be indeed good times for investors of many stripes including traders, intermediate term and longer-term investors," Stoltzfus wrote.

Taking Stoltzfus' outlook into consideration, we wanted to take a closer look at three stocks getting a round of applause from Oppenheimer. As the firm’s analysts think each could surge over 50%, we used TipRanks’ database to find out even more about the trio.

Clarus Therapeutics (CRXT)

Metabolic diseases and hormonal disorders form a serious class of illnesses and are notoriously difficult to treat. Clarus is working on meeting the needs of patients with these disorders, through the development of metabolic therapies and androgen replacement. The company has one product, Jatenzo, which has been approved as a treatment for hypogonadism, and four additional drug candidates in pre-clinical testing for a variety of metabolic applications.

Jatenzo is the first – and for now, the only – oral softgel capsule for testosterone replacement therapy. It received FDA approval for the treatment of male hypogonadism back in 2019, but introduction to the US market was held up by patent litigation with Lipocine. The litigation, involving intellectual property and patent interference, has been settled by agreement between the parties as of this past June. The terms are sealed, but do not involve financial payments by Clarus – and the way is now clear for commercialization of the drug.

This company had one other major piece of news this summer, when in early September it announced the closing of its business combination with Blue Water Acquisition, a SPAC entity. The combination merged the companies and saw the CRXT ticker start trading on the NASDAQ on September 10. Clarus gained $25.3 million in gross proceeds from the SPAC transaction.

Among the healthcare name’s fans is Oppenheimer’s Leland Gershell. The analyst rates CRXT an Outperform (i.e. Buy), and his $12 price target implies an upside of ~112% for the year ahead. (To watch Gershell’s track record, )

“With twice-daily capsule Jatenzo, Clarus brings a first-in-class oral option to ~2.2M US men who receive testosterone replacement products. We expect Jatenzo will take growing share from topical and injectable mainstays as well as increase overall treatment rates among the ~6M US men diagnosed w/low testosterone. Alongside commercial execution, CRXT is actively pursuing once-daily development, indication expansion, and ex-US markets. In women's health, recently in-licensed candidate CLAR-121 has potential to address breast disease (inflammation, cancer). Trading at a $[125M] enterprise value and with ~one year of cash on the balance sheet, we expect shares to Outperform as Jatenzo’s launch builds steam," Gershell opined.

The Oppenheimer view is one of two positive reviews on record for Clarus, giving the stock its Moderate Buy consensus rating. Share are trading for $5.67 and their average target of $16 is even more bullish than Gershell allowed, suggesting a robust upside of 182% in the next 12 months. (See CRXT stock analysis on TipRanks)

Denali Therapeutics (DNLI)

Next up is Denali Therapeutics, a clinical stage biopharma company with a special focus on neurodegenerative diseases. The company is working on a score or more of drug candidates, with most in early preclinical development - but 5 candidates have begun human clinical trials. The drug candidates are engineered small molecules designed to cross the blood-brain barrier, and the targeted diseases include Alzheimer’s, ALS, Parkinson’s, and lupus, among others.

In the last few months, Denali has reported several milestones in its clinical trial programs. A Phase 1/1b study of DNL151, a potential treatment for Parkinson’s, met its safety goals and is on track for mid-stage clinical trials by the end of this year. Also this past summer, DNL310, being investigated in patients with Hunter syndrome, showed positive data in its Phase 1/2 study. The data demonstrated a durable CNS effect of the drug candidate, along with an acceptable safety profile. The company is planning a further clinical trials of DNL310 in the first half of next year.

In a somewhat more advanced trial stage, DNL758 entered Phase 2 dosing. This trial is being conducted in partnership with Sanofi, and is looking at the drug candidate as a treatment for lupus. Earlier this year, Denali received a $15 million payment from Sanofi, in relation to the start of the Phase 2 study. Denali has rights to further milestone payments on this drug for development, regulatory, and sales progress, and will receive royalties upon commercialization.

Finally, in early September, Denali announced that it had begun a Phase 1b study of DNL343, a proposed treatment for ALS, or Lou Gehrig’s disease. This is a severe, progressive neurodegenerative disease, with a patient base of 20,000 and up to 5,000 new diagnoses each year in the US alone. The company plans to present healthy volunteer data on the DNL343 Phase 1 study in October of this year.

All of this gives Denali multiple pathways for future advancement – and brought notice from Oppenheimer analyst Jay Olson.

“We view DNLI as an underappreciated emerging leader in neurodegeneration and CNS disorders with several late-stage development candidates based on novel and differentiated mechanisms of action (MOA) with strong preclinical and clinical data. DNLI applies scientific insights into the genetic and biological processes underlying disease pathology to pursue biomarker strategies that optimize development and potential commercial uptake,” Olson wrote.

The analyst added, "We view DNLI's biomarker-driven approach as de-risking development and commercialization based on scientific rationale, and we believe that partnerships with industry leaders provide external validation."

Unsurprisingly, Olson rates this stock an Outperform (i.e. Buy) along with an $85 price target. Investors stand to pocket ~67% gain should the analyst's thesis play out. (To watch Olson’s track record, )

Overall, DNLI has 10 analyst ratings, split among 7 Buys and 3 Holds. This gives the stock a Moderate Buy from the analyst consensus. Shares are selling for $51, and the $91.38 average price target suggests it has a 79% one-year upside potential. (See DNLI stock analysis at TipRanks.)


The last Oppenheimer pick we're looking at is EZCORP, a Texas-based company that operates pawn shops across the US and Mexico, and into Central America. The company has a total of 1,143 pawn store locations, with 627 of that total in Latin America.

On September 6, the company announced that it had acquired 128 new stores in Mexico – these numbers are included in the totals above – for a purchase price of $33.8 million. That price includes $17.3 million in cash, 212,870 shares of EZPW common stock, and repayment of $14.9 million worth of the seller’s debt. The seller, Cash Apoyo Efectivo, is entitled to additional payments up to $4.6 million in the next two years based on store performance. The newly acquired stores are located in the Mexico City area and have solid brand recognition in their home market.

The pawn business thrives when people are facing rough times, and EZCORP’s shares reflect that. The stock has gained 60% this year, easily outpacing the S&P 500’s 19% gain in the same period. Turning to financial results, EZCORP reported $174 million in total revenue for its third fiscal quarter of 2021 (ending June 30), along with $157.2 million in outstanding pawn loans. The pawn loan outstanding number – a key metric for the company – was up 39% year-over-year. The company reported an improvement in inventory turnover from 2.9x to 3.1x.

Brian Nagel, one of Oppenheimer’s 5-star analysts, describes this company as ‘overlooked opportunity,’ and writes: “Upon our initial study, we conclude that the company and its shares embody many key characteristics of ultimately successful small-cap consumer investment stories, including: 1) meaningful market share opportunity within a large and fragmented sector; 2) new senior leadership working to develop an improved strategy and to strengthen corporate controls; 3) solid cash position and balance sheet; 4) building external tailwinds enabling the company to better leverage recent internal efforts; and 5) depressed equity valuation.”

Taking all of the above into consideration, Nagel rates EZPW an Outperform (i.e. Buy) along with a $12 price target. This target conveys his confidence in EZPW's ability to climb 57% higher in the next year. (To watch Nagel’s track record, )

Some stocks slip under the radar, picking up few analyst reviews despite sound performance, and this is one. Nagel's is the only recent analyst review on record here. (See EZPW stock analysis on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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GOEV Stock – EV Company of the Future?

Canoo Inc. (GOEV) is a Los-Angeles based mobility technology firm focused on designing, engineering, developing, and manufacturing EVs for both commercial and private purposes. The company uses skateboard architecture technology Read More... The post GOEV Stock – EV Company of the Future? appeared first on TipRanks Financial Blog.

GOEV Stock – EV Company  of the Future?

Canoo Inc. () is a Los-Angeles based mobility technology firm focused on designing, engineering, developing, and manufacturing EVs for both commercial and private purposes. The company uses skateboard architecture technology to manufacture B2B delivery vehicles and lifestyle vehicles along with multipurpose delivery vehicles in the United States. Canoo’s modular electric platform is built to deliver maximum interior space in vehicles. 

Additionally, the company includes a range of vehicle applications for both businesses and individuals. These factors have made Canoo an intriguing speculative bet in the EV space.

Currently, I'm somewhat bearish on GOEV stock. (See Canoo Inc. stock charts on TipRanks)

Volatile EV market

One of the reasons for this stance is the volatility of the EV market. Since the onset of the pandemic, EV stocks have surged and dropped to a degree that makes many investors uncomfortable. Indeed, like other EV stocks, Canoo's valuation has become a point of contention among bears, with bulls noting that the company's long-term growth prospects make this valuation worthwhile.

That said, one of the key contributing factors to Canoo's volatile nature is simply the fact that this is a de-SPAC (special purpose acquisition company) company. The SPAC space has been ultra volatile of late, due to the speculative nature of companies that choose reverse mergers to go public.

Accordingly, GOEV stock has fluctuated between a massive range of $5.75 per share and nearly $25 per share over the past year. Currently, GOEV stock is trading near the lower end of this range, as bearish sentiment on this company builds.

Can Canoo come roaring back? Or is the music starting to stop? Let's dive in.

Key Catalysts for GOEV Stock

Perhaps the most bullish argument that can be made for GOEV stock is that this company is a potential short squeeze candidate. Simply because of the company's short interest of late, retail investors may want to take a gamble on this stock squeezing.

Such a stance is not insane. Other companies with low share prices, high short interest and borrow fee rates, and low floats, have squeezed in incredible fashion. However, the potential for GOEV stock to pick up the momentum necessary to initiate such a squeeze appears to be the problem.

Earlier this year, GOEV stock rallied by a whopping 35%, courtesy of Reddit users bidding for short-term play. In fact, nearly 33% of the company's floating shares were sold short.  

However, since then, sentiment on platforms such as Reddit group WallStreetBets has calmed down. Investors seem more concerned with the fact that Canoo has recorded no revenue and an operating loss of nearly $97 million, per its first-quarter results posted in May. However, Canoo did get a temporary boost, as it ended the quarter with $641 million in cash and cash equivalents.

In its Q2 report, the company recorded a wider-than-expected loss in the quarter but managed to generate 9,500 non-binding pre-orders. Moreover, loss from operations is also down by 426.8% year-over-year, while total assets took a blow of over $700 million, nearly a 6% fall year-over-year. Additionally, the company's net loss grew by approximately 385% to over $110 million.

Canoo's EBITDA loss of around $76 million was also up from $17.7 million during the same quarter in 2020. Further, Canoo also reported negative operating cash flows amounting to $108.8 million, along with around $565 million in cash.  

These are not bullish numbers at all.

The Bigger Picture for GOEV

According to Tony Aquila, CEO of GOEV, the company is planning to introduce sustainable and affordable vehicle options to the global market. This strategy takes time to enact, and investors shouldn't focus on recent results as indicative of what the future will hold.

On the other hand, Canoo has recently made two notable moves. First, Canoo has secured a manufacturing contract with VDL Nedcar. Secondly, the company has selected Oklahoma as the partner for the manufacturing plant.

Indeed, on the production front, Canoo has sourced 87% of its components at the end of the second quarter, 13 points higher year-over-year. When bulk materials are excluded, the company has sourced 95% of its manufacturing materials. These are good signs pointing to production commencing as planned.

Canoo is set to launch its first product in 2022, which the company will follow up with multipurpose delivery vehicles, along with pickup trucks. Aquila added that the company is looking to secure the company’s future and plans to focus on the fundamentals. Further, he claims that companies and stock prices do not always factor in positive events or catalysts.

The company is in a pre-revenue state and aligned with analyst expectations of revenues, hitting the $75 million mark in 2022. This would signify a price-to-sales multiple of over 25, considering the current market cap of around $2.15 billion.

Indeed, most fundamentals-oriented investors would say that's high. However, for a company with the growth potential of Canoo, perhaps this is reasonable. Time will tell.

What are Analysts saying about GOEV Stock?

As per TipRanks' analyst rating consensus, Canoo is a Hold. Out of 4 analyst ratings, there are 2 Buy recommendations, 1 Hold recommendation, and 1 Sell recommendation.

The stock has an average Canoo price target of $11.50, implying upside of 27.21%. Analyst price targets range from a high of $19 per share to a low of $5 per share.

Bottom Line

There's an intriguing bull and bear case to make with GOEV stock right now. Indeed, the EV sector is seeing higher levels of competition of late, making this space a more intriguing one to watch. However, picking the winners out of this early-stage pool is rather difficult.

Canoo is an intriguing option with impressive upside, but also holds extremely high risk right now. Accordingly, investors should size their positions accordingly when considering such speculative plays.

Disclosure: At the time of publication, Chris MacDonald did not have a position in any of the securities mentioned in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

The post GOEV Stock – EV Company of the Future? appeared first on TipRanks Financial Blog.

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