Making the right decision in the investment market is not an easy task. Investors must wade through the sea of often conflicting data and find the kernels of fact that can point to the likely future of the stock. Finding some semblance of meaning and pattern in the jumble of raw information is a necessary prerequisite for success. This is where TipRanks A smart result enters
Using a set of proprietary algorithms, Smart Score collects a set of data for each stock – and sorts it according to 8 factors known to affect the stock’s price. The result is a single distilled rating on a scale of 1 to 10 that can tell the investor at a glance the overall health of the stock. It’s easy to look behind the score and add context to the stock’s performance.
So let’s get an early start on that and look “under the hood” at 2 stocks that are sending bullish signals to investors – with their “Perfect 10” smart scores.
Arhaus, Inc. (ARHS)
The first stock we’ll look at is Arhaus, a furniture company based in Ohio with 80 showrooms across the US. The company manufactures and sells a wide range of furniture for both the home and patio, including complete sets for home offices, bedrooms, living rooms and dining rooms. Arhaus is proud to work with small artisans around the world in sourcing products.
While Arhaus maintains a significant network of physical locations, the company also maintains a strong e-commerce segment. All in all, Arhaus is working hard in its preferred direct-to-consumer mode. With a long-standing reputation for customer-centric service, innovative product design and responsible sourcing, the company has a high degree of success in this preferred business model.
This success can be seen in the latest quarterly financial reports for 2Q22. The report shows that revenue grew 66% year-over-year to $306 million; this represents a significant portion of the year-over-year six-month increase of 55.5%; from January 1 to June 30, Arhaus brought in $553 million to the top line. The company’s net income came in at $37 million for the quarter, or 28 cents per share, up 12% year-over-year.
Peter Keith, a 5-star analyst with Piper Sandler, lays out several reasons why Arhaus should continue to deliver solid returns for investors, writing: “We believe ARHS continues to perform at a high level with (1) new product introductions; (2) Improved marketing with improved return on advertising spend; & (3) Improved Website. Additionally, we believe ARHS’s value proposition has never been stronger given that 50% of its sales are sourced in the US, allowing for fewer price increases compared to the competition.”
Along with these comments, Keith gives this stock an Overweight (ie, Buy) rating. His price target of $12 suggests ARHS has a one-year upside of 34%. (To watch Keith’s record, Press here)
Wall Street finds broad agreement with the bullish view here – out of 6 recent analyst reviews, 5 are Buy versus just 1 Hold, for a strong consensus rating of Buy. The stock is trading at $8.92, and its average price target of $11 suggests a 23% year-to-date gain. (See ARHS stock analysis at TipRanks)
The cook’s pantry (COOK)
Next is a company that lives in the world of specialty food distribution. The Chef’s Warehouse has operations and locations in major metropolitan areas of the US and Canada; the company began 30 years ago as a source and distributor of high-end chef food products and today serves the finest restaurants, hotels, caterers and gourmet retailers throughout North America.
This service-oriented company has benefited greatly from the end of the COVID restrictions and the return to a more normal business climate. The result can be seen in the pattern of quarterly earnings results: steady year-over-year gains for the past two years.
In 2Q22, the most recent quarter, CHEF’s top and bottom lines beat industry estimates. Revenue came in at $648.1 million, up 53% from a year earlier and about 8% above estimates. Ultimately, earnings of 51 cents per share beat the 35 cents forecast — and were nearly 13 times higher than the prior quarter’s 4 cents result.
Even better, the company raised its full-year financial guidance, forecasting between $2.375 billion and $2.475 billion in total sales for 2022 (up from $2.13 billion to $2.23 billion) and gross profit between $553 million and $576 million (up of $500 million and $524 million).
BTIG’s 5-star analyst Peter Saleh notes all this and does not hesitate to rate this company as a Buy. The $46 price target he sets suggests ~37% growth potential over the next year. (To watch Saleh’s record, Press here)
Backing up his position, Saleh wrote: “We believe in the flow [share] the price does not accurately reflect sales strength and the trajectory of the business… We believe the outlook may still turn out to be somewhat conservative as business events and travel resume as we move into the fall. This quarter’s move to the upside puts us at the high end of the new guidance range, so while we’ve been impressed with the pace of sales growth and margin progression, we’re not convinced this is the latter.”
Overall, CHEF sock received 4 recent analyst reviews and all of them are positive, giving it a unanimous consensus rating of Strong Buy. Shares of CHEF are currently valued at $33.78, and their average target price of $47.75 suggests a 12-month upside potential of 41%. (Check out CHEF stock analysis at TipRanks)
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Rebuttal: 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.