After two years of bullish momentum, DeepSeek proved that the market is still vulnerable to sudden disruptions, reminding investors to be selective with their stock choices. You can’t predict when a black swan will appear, but you can strengthen your portfolio with resilient picks that deliver returns in any market environment.
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To make this easier, TipRanks developed the Smart Score – an AI-powered tool designed to uncover strong investment opportunities. Using natural language processing, it sifts through vast amounts of market data, analyzing insights from thousands of traders, stocks, and millions of daily transactions to identify high-quality picks.
The Smart Score makes it simple for you by using that data to rate every stock against a set of factors that are known to correlate with share outperformance. Then, it gives each stock a score – a single digit on a scale of 1 to 10 – with the ‘Perfect 10’ denoting the hidden gems, the nuggets of gold in the stream of stock data.
Against this backdrop, we’ve opened up the Smart Score to find two of these top-scoring stocks that deserve a closer look. Let’s dive in.
ADTRAN Holdings (ADTN)
The first ‘Perfect 10’ stock on our list, Adtran, works in the telecom field. The company provides networking and communications equipment in both the domestic US markets and on the global scene. Adtran operates in 68 countries and gives its customers solutions for voice, data, video, and internet communications. It can work with a wide range of the network infrastructures operating around the world. These include fiber optic and aggregated networks, open optical networking, and residential and business connection solutions. The company also provides cloud software solutions and network infrastructure maintenance.
Based in Huntsville, Alabama, and in the telecom business since 1985, the company has a market cap of ~$764 million, while its clients include private individuals, enterprise clients, and government entities.
Adtran has a strong product line and a solid market position, but the company did see revenues and earnings fall in 3Q24. In that report, the company’s top line came to $227.7 million, down 16.4% year-over-year, while the non-GAAP earnings slipped from 18 cents per share to 5 cents per share in that period.
It’s important to note that the telecom industry, like many others, is highly cyclical and that those cycles can bring opportunities for investors. Maintenance schedules need to be followed, networks need periodic upgrades, and new technology can bring wholesale replacements of existing infrastructure.
Craig-Hallum analyst Christian Schwab, who is counted among the top 3% of his peers by TipRanks, sees this as a net-plus for Adtran.
“We believe there is a meaningful upside opportunity in Adtran shares given the company’s positioning as a supplier of networking and communications equipment ahead of a multiyear trend of substantial fiber investments, rip-and-replace opportunities, emerging operating leverage and earnings power, and a strengthening balance sheet,” the 5-star analyst opined. “We believe as the company heads into 2025, coming off the recent market bottom, with a strong fundamental fiber investment backdrop, a multi-year path to annual revenue of $1.2+ billion and low double-digit operating margins can become more evident to investors, at which point we calculate the company can drive annual EPS of ~$1.00.”
Given this potential, Schwab rates ADTN shares as a Buy, with a $15 price target that points toward a one-year gain of 53%. (To watch Schwab’s track record, click here)
There are six recent analyst reviews on record for Adtran shares, and they are unanimously positive for a Strong Buy consensus rating. The stock is priced at $9.82, and its average price target, $11.45, indicates room for a 16.5% gain in the coming year. (See ADTN stock forecast)
Workiva, Inc. (WK)
Next on our list of top-scoring stocks is Workiva, a company offering its customers a cloud-based software platform for business data analysis. It’s vital in business to keep the left hand informed of what the right hand is doing – and that’s what Workiva’s platform is designed to do. The company boasts that it enables transparent reporting, with a ‘fit-for-purpose’ tech solution that streamlines processes, connects teams to their data and to their peers’ data, and ensures consistency of reporting formats. And it does all of this using an audit-ready cloud platform that is both controlled and secure. The company’s platform is available through the popular SaaS subscription model.
In business since 2008, and headquartered in Iowa, Workiva today boasts a market cap of $6.2 billion. The company employs over 2,400 people out of 19 offices around the world, and claims that its software tools are in use by more than 6,000 customers in 180 countries.
Workiva’s revenues have been trending upwards over the past several quarters, and this continued in the company’s last financial release, for 3Q24. Revenues in that quarter came to $186 million, up 17.7% year-over-year and some $3.42 million better than had been anticipated. At the bottom line, the company reported a non-GAAP EPS of 21 cents; while this missed the forecast by 2 cents per share, it was a strong turnaround from the 65-cent net EPS loss reported in the prior-year quarter. In the company’s investor letter, the CEO noted that Q3 saw strong demand, a high volume of account expansion deals, and record bookings.
This stock has caught the eye of Raymond James analyst Brian Peterson, another expert counted in the top 3% of the Street’s analysts. Peterson is impressed by Workiva’s ability to bring in new bookings, and its potential to expand subscriptions and revenues.
“We believe that the accelerating bookings dynamics observed in 3Q24 can continue and drive an acceleration in subscription revenue over the next 12 months. This dynamic coupled with positive (albeit early) commentary around the company’s multi-pronged approach to revamping its go-to-market organization (medium term tailwind), gives us confidence in the company’s ability to achieve its 2027 revenue target of $1.1-1.2 billion that we do not believe is reflected in the stock today,” Peterson stated. “Ultimately, we are hard-pressed to find a quality SaaS name with accelerating growth (>20% subscription growth) and a medium term growth catalyst that still trades at a discount to the broader group, and see the potential for both estimates to come up and multiple expansion in 2025.”
Peterson rates WK shares as Outperform (i.e., Buy), and he complements that with a $135 price target that suggests a one-year upside potential of 34%. (To watch Peterson’s track record, click here)
Like Adtran above, Workiva boasts a unanimously Strong Buy consensus rating, this one based on 8 Buy recommendations from the Street. The stock’s $100.47 trading price and $128 average target price together imply that the shares have a gain of ~27.5% in store for the year ahead. (See WK stock forecast)
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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.
