This bold growth investor remains optimistic even amid Wall Street’s downturn.
Recent weeks of declining stock prices might concern most investors, but Cathie Wood, co-founder, CEO, and investment manager at Ark Invest, is seizing the opportunity to buy. She has been actively increasing her stakes in various stocks for her high-growth exchange-traded funds.
Thursday was yet another productive day for purchasing stocks. Ark Invest bolstered its holdings in Tesla (TSLA 5.33%), Iridium Communications (IRDM 0.38%), and Intellia Therapeutics (NTLA 3.56%). Let’s delve into these three stocks that have recently experienced significant downturns.
1. Tesla
It has been three months since Tesla reached an all-time high last holiday season, coinciding with CEO Elon Musk’s rise as a notable political figure post-election. The stock has lost more than half of its peak value, marking a challenging period for the top electric vehicle manufacturer. After a decade of consistent double-digit growth, sales stagnated last year, and Tesla has fallen short of Wall Street’s profit predictions in three out of the last four quarters.
Despite the downturn, some positive news is on the horizon. While there are concerns that Musk’s political involvement may be impacting the brand’s international appeal, analysts anticipate Tesla’s return to double-digit growth this year. Additionally, the stock has seen gains over the last two trading days, partly due to a timely analyst upgrade.
Image source: Getty Images.
Andres Sheppard from Cantor Fitzgerald revised his outlook from neutral to bullish, maintaining a price target of $425, signaling an 80% potential upside from current levels. He anticipates several upcoming catalysts, including the production of more affordable Tesla vehicles in the second quarter, the launch of Tesla’s Cybercab robotaxi service next year, and ongoing improvements in Tesla’s self-driving technology.
2. Iridium
Iridium, a data and voice satellite communications company, started this year strong, peaking 20% higher month ago, yet has since given back all its gains. Over the past year, Iridium has lost a third of its value.
The company now serves 2.5 million billable subscribers, an 8% year-over-year increase, but its top-line growth has been modest. Having only one year of double-digit growth in the past six years, Iridium’s revenue guidance projects only 5% to 7% growth moving forward.
Looking ahead, Barclays analyst Mathieu Robilliard recently lowered his price target for the stock, fearing that growth may further decelerate in a tightening competitive landscape. Despite this, both Robilliard and Wood remain optimistic, with Wood increasing her Iridium holdings during the first four trading days of this week.
3. Intellia Therapeutics
Cathie Wood has been consistently buying gene-editing stocks, which represent a niche yet promising segment of the biotech industry. Intellia Therapeutics, known for its CRISPR-based therapies targeting rare genetic disorders, has faced a severe decline, plummeting 96% since its peak above $200 nearly five years ago.
Mitchell Kapoor from Wainwright recently began coverage on Intellia with a bullish rating and a $30 price target, encouraged by the company’s NTLA-2002 candidate offering a one-time treatment, differing from prolonged preventative therapies. Another analyst, Joon Lee from Truist, reduced his price target from $90 to $50. Despite the price drop, with Intellia currently trading in the single digits, achieving these targets would require significant growth.
Rick Munarriz does not hold any positions in the mentioned stocks. The Motley Fool holds positions in and recommends Intellia Therapeutics, Tesla, and Truist Financial. Additionally, The Motley Fool recommends Barclays Plc. For further details, refer to their disclosure policy.
