Navigating the Challenges of Market Volatility

February presented difficulties for the stock market, as issues with economic indicators, reduced consumer confidence, and trade tariffs led to fluctuations. The S&P 500 dropped by 1.4% throughout the month.

In this kind of market, investors are advised to concentrate on the stocks of firms capable of enduring short-term variability while seizing growth chances to achieve robust long-term returns. Gaining insights from leading Wall Street analysts, who perform thorough assessments of companies’ advantages, risks, and future possibilities, can offer significant value in pinpointing these stocks.

Keeping this perspective, here are three stocks suggested by top analysts, as reported by TipRanks, a platform that assesses analysts based on their performance history.

Booking Holdings (BKNG)

First on the list is Booking Holdings, a dominant player in the online travel industry. The company recently posted impressive fourth-quarter earnings, exceeding market expectations, fueled by continued strength in travel demand. Booking Holdings is actively investing in its future growth through various initiatives, including the integration of generative AI to enhance services for both travelers and partners.

Following these robust results, Evercore analyst Mark Mahaney reaffirmed his bullish stance on BKNG stock, raising his price target from $5,300 to $5,500. He pointed out that the company’s Q4 performance was strong across all regions and travel segments. Additionally, key business metrics such as bookings, revenue, and room nights showed acceleration.

Mahaney highlighted that although Booking Holdings is more than double the size of Airbnb and three times bigger than Expedia regarding room nights, it showcased quicker growth in these critical areas in Q4 2024. He credited this to the company’s scale, high margins, and seasoned management, labeling it as the top-quality online travel stock in the market.

“We continue to view BKNG as fairly priced, with sustained high EPS growth (15%), robust free cash flow production, and a reliable history of execution,” Mahaney remarked.

He remains confident that Booking Holdings can sustain long-term growth targets of 8% in bookings and revenue, along with 15% EPS growth. He also highlighted the company’s long-term investments in merchandising, flights, payments, connected travel experiences, and AI-driven services, as well as its growing online traffic.

Analyst Ranking:

Mahaney holds the #26 spot among more than 9,400 analysts monitored by TipRanks, boasting a 61% success rate and an average return of 27.3% on his advice.

Visa (V)

The second stock recommendation is Visa, a global leader in payment processing. At its Investor Day on February 20, Visa outlined its growth strategy and emphasized the revenue potential in its Value-Added Services (VAS) and other business segments.

After the event, BMO Capital analyst Rufus Hone reiterated his buy recommendation for Visa, keeping a price target of $370. He observed that Visa tackled several investor worries, such as the potential for expansion in consumer payments and the company’s capacity to maintain high-teens growth in VAS.

Hone pointed out that Visa perceives a $41 trillion opportunity in consumer payments, with $23 trillion still not fully served by current payment infrastructure, suggesting considerable growth potential.

Regarding Visa’s VAS business, the company provided deeper insights, projecting long-term revenue growth of 9%-12%. Visa also expects a shift in its revenue composition, with Commercial & Money Movement Solutions (CMS) and VAS becoming the primary revenue drivers, surpassing consumer payments over time. By comparison, these two segments contributed only about one-third of total revenue in fiscal year 2024.

Hone considers Visa a fundamental investment in the U.S. financial landscape.

“We anticipate Visa will sustain double-digit revenue growth over the long term, with consensus estimates near 10% growth,” he concluded.

Hone holds a position as #543 out of more than 9,400 analysts on TipRanks, with a 76% success rate and an average return of 16.7% from his recommendations.

CyberArk Software (CYBR)

The final stock pick is CyberArk Software, a leader in identity security solutions. The company recently posted solid Q4 2024 results, reflecting continued demand for its cybersecurity offerings. On February 24, CyberArk held its Investor Day to discuss its financial performance and growth outlook.

Following the event, Baird analyst Shrenik Kothari reaffirmed his buy rating on CYBR stock and increased his price target from $455 to $465. He emphasized that CyberArk remains a dominant force in cybersecurity and significantly expanded its Total Addressable Market (TAM) to $80 billion, up from $60 billion previously.

Kothari credited this TAM growth to increasing demand for machine identity security, AI-driven security, and updated Identity Governance and Administration (IGA) solutions. He noted that machine identities have grown 45 times compared to human identities, leading to a significant security gap—one that CyberArk is well-equipped to fill, particularly after its Venafi acquisition.

Moreover, CyberArk’s Zilla Security acquisition is assisting the company in bolstering its position within the IGA sector. Regarding AI-driven security, Kothari commended CyberArk’s innovation, especially the launch of CORA AI.

Looking ahead, management aims to achieve $2.3 billion in annual recurring revenue and a 27% free cash flow margin by 2028, driven by continued platform consolidation.

“With robust enterprise adoption, strategic execution, and a comprehensive growth pipeline, CyberArk is well-prepared for continued long-term growth,” Kothari stated.

Kothari holds the #78 position among TipRanks’ 9,400+ analysts, with a 74% success rate and an average return of 27.7% on his recommendations.

Concluding Remarks

Market volatility continues to pose challenges for investors, but selecting fundamentally strong companies with long-term growth potential can mitigate risks. Booking Holdings, Visa, and CyberArk Software stand out as top picks from leading Wall Street analysts, thanks to their strategic positioning, financial resilience, and ongoing innovation.

For those pursuing long-term opportunities, these three stocks may present attractive returns even amid short-term market volatility.