Disney (DIS)
Entry: Unlock
Price target: 140.00-150.00
Second PT: Unlock
Disney is already household name around the globe and they’re now extending their reach into the Middle East by opening new theme park in Abu Dhabi. The company announced its plans last week along with quarterly earnings, which boosted shares by 15% on the week, restoring them back above the key 100 and 200 day moving averages. These lines are often used by institutional investors as guidance for bullish and bearish trends, and now that Disney is trading above both, it may be indicating that a further bullish move is coming.
At a price to earnings ratio of 21.5x, Disney trades below the S&P 500’s average of 28x, making them an attractive buy for investors at this price. The company has underperformed the market for the past decade as they struggled with internal transitions and the pandemic, but their numbers are improving and investments are starting to pay off. Covid brought the company’s operations to a halt, forcing them to suspend their dividend. Around the same period Disney started to move away from TV broadcasting and to direct-to-consumer streaming. This change was very expensive for the company, but its leaders recognized the profit potential in streaming.
This move into streaming can arguably take Disney from being a value stock to being a growth stock, especially with the additional revenue they’ll generate once their new park opens its doors. While the park is not set out to open till early 2030s, the streaming side of the business generated $6.12 billion last quarter (Disney+, Hulu, and ESPN), roughly 28% of the total quarter’s revenue. Although streaming cost the company more than $10B in losses, it finally turned profitable early last year and is expected to remain so in the coming quarters. Last but not least, when looking at the company’s balance sheet, Disney has $105B in positive equity and holds $10.9B in free cash flow.
Lyft (LYFT)
Entry: Unlock
Price target: 19.00
Second PT: Unlock
Shares of ride-hailing company Lyft surged last week following the release of its quarterly earnings report. While revenue grew by a modest 13.5%, the real catalyst behind the stock’s rally was the announcement of a $750 million share buyback program, equivalent to roughly 10% of the company’s entire market capitalization. Buybacks are typically seen as a vote of confidence by management and can help boost share prices by reducing the number of shares available on the market.
The stock jumped 28% in reaction to the news, earning Lyft a renewed spot on our watchlist. It’s worth noting that Lyft has been on our radar since October of last year, and it has already returned 21% since our initial analysis. Now that it has hit our first price target of $16.00, we’re setting a new target range of $19.00–$20.00.
From a market share perspective, Lyft still lags far behind Uber, but it remains a meaningful player in the industry. Lyft reported a 31% year-over-year increase in revenue, reaching a record $5.79 billion, and importantly, it achieved positive net income, a major milestone for any growing tech company. In comparison, Uber brought in $44 billion in revenue last year and is currently valued at $173 billion, versus Lyft’s much smaller $7 billion market cap. While Uber clearly dominates the sector, Lyft’s valuation suggests there may be room for upside if it can continue executing and narrowing the performance gap.
Please note: investors should be cautious, Lyft’s stock tends to be volatile, often reversing upward moves sharply. Anyone looking to invest should have a high risk tolerance and be prepared for potential pullbacks. One must also watch earnings closely to assure the company is maintaining financial stability. We'll be updating our premium members as needed about any critical developments for the company that could change the stock's projections.
Rocket Lab USA (RKLB)
Entry: Unlock
Price target: 24.00
Second PT: Unlock
The race to more efficient space travel is heating up, with companies around the globe scrambling to launch vehicles and satellites into orbit and back. One of those companies is Rocket Lab, which has recorded 63 small satellite launches in its lifetime and has partnered with the U.S. Air Force Research Laboratory for a launch a launch and return to earth mission in the next 12-18 months.
The company’s pride and joy is their Neutron rocket, which is a partially reusable (SpaceX approach) launch vehicle that could carry 28,700lb to low Earth orbit. Space companies are racing to become THE go-to launch company for constellation deployment and interplanetary missions. In basic words, they’re trying to make it easier to send things to space and come back using that same vehicle without high costs.
Rocket Lab’s numbers have seen a notable uptick in recent years, with revenue nearly doubling between 2023 to 2024. The company ended last year with $436M in revenue, up 78%, but their biggest struggle has remained their bottom line. Luckily, investors recognize that small companies, especially those who have high ambitions and/or are in manufacturing, often don’t have strong profits because the capital is going into research and development. What’s important is revenue growth, which Rocket Lab is doing just fine.
If one is looking to buy Rocket Lab right now, they should be investing in the story more so than the numbers. Valuation at this stage may be difficult to assess because the industry has a very large upside potential, and if Rocket Lab can deliver on their promises then they can own a big piece of the aerospace & defense space. This is not yet a safe “buy and forget” type investment, but it is one to pay close attention to as they successfully complete more missions and land bigger contracts.
We'll be updating our premium members as needed about any critical developments for the company that could change the stock's projections.
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You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here to unlock more high probability set-ups!
You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here to unlock more high probability set-ups!
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The stocks posted above are the preliminary stocks and set ups we’ll be watching this week. All price points are subject to change based on market performance and sector health. Please do your own research and analysis on these companies/charts before taking on any set ups. Trade at your own risk and as always, good luck!