Now that the presidential election season has come to a close, investors are presented with an opportunity to reassess their stock portfolios in light of shifting market conditions. Goldman Sachs analysts are evaluating individual stocks, pinpointing those best positioned to thrive in a growth-oriented market. We’ve used the TipRanks database to identify two names that Goldman’s analysts have singled out.
Growth Opportunities Abound
KinderCare Learning Companies (KLC) is a for-profit early childhood education company that has been in business for 55 years. Founded in 1969, the company oversees a network of educational centers that spans 40 states and can serve up to 200,000 children. This network includes 1,500 early childhood education centers, as well as before- and after-school programs at more than 900 additional sites. In addition, KinderCare operates the Crème Schools, a network of premium early education centers that offer parents and students a variety of themed classrooms and engaging learning environments.
A Leader in Early Childhood Education
Goldman analyst George Tong expects big things from this newly public stock. He explains KinderCare’s prospects going forward: “We believe KLC is differentiated through its focus on community-based child care centers, which has leaned into the new work-from-home dynamic to drive center occupancy rates to 71%, above pre-COVID levels of 69%. The company’s unique targeting of customers across all income demographics additionally broadens its addressable market and provides access to a stable and growing stream of government child care subsidies.” Tong initiates his coverage of KLC with a Buy rating, and his price target of $41 points toward a one-year gain of 49%.
Biotech Beyond Pharmaceuticals
LivaNova (LIVN) plays an important role in the medical device niche, particularly in the area of neuromodulation. The company is best known to the public for its VNS (vagus nerve stimulation) products, used in the treatment of epilepsy. This frequently dangerous central nervous system condition is usually treated through medication – but for some patients, epilepsy is drug-resistant. VNS devices operate through direct stimulation of the nervous system, providing an electrical stimulation when a seizure is imminent.
Treating Epilepsy and Depression
In addition to using VNS to treat drug-resistant epilepsy, LivaNova is also pioneering the use of the technology to treat depression. Chronic depression is notoriously difficult to treat, and many patients will cycle through multiple medication regimes – only to find that none help. LivaNova’s VNS implant can be used to send a mild electrical stimulation to the brain through the vagus nerve – which connects to areas of the brain that control mood. The stimulation device has shown potential in this indication.
A Leader in Neuromodulation
Goldman analyst David Roman notes that the company has seen headwinds in its overall stock performance this year. He says of LivaNova, “LIVN shares have struggled to find periods of outperformance, as strategic shifts in the business and pipeline setbacks have put downward pressure on earnings and the stock’s P/E multiple. As the business produces consistent results and the margin profile is enhanced, we think this period of underperformance fades into the rear view mirror.” Roman is upbeat for the long term, and adds, “Looking ahead, we see LivaNova’s base business generating approximately 5% top-line growth from stable-end markets and de novo neuromodulation implants as well as a near-term bolus of growth from an identifiable product cycle upgrade in cardiopulmonary (52% of sales).” Quantifying his stance, the Goldman analyst puts a Buy rating on LIVN stock, and he complements that with a price target of $65, suggesting a one-year upside of 25.5%.
Finding Opportunities in the Market
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights. It is very important to do your own analysis before making any investment.
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