As bitcoin navigates through the volatile waves of the crypto market, its price on Feb. 21, 2024, reflects a complex interplay of market dynamics. Oscillating between $50,820 and $52,902 within a 24-hour frame, the leading digital currency continues to showcase significant trading activity. With a market capitalization over the $1 trillion mark, bitcoin traders are […]
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Cardano (ADA), the eighth-largest cryptocurrency, finds itself in a perplexing situation as it grapples with a battle between bullish and bearish forces, leaving investors deciphering mixed signals in a turbulent market.
The optimism that briefly emerged on January 29th, as ADA’s market structure turned bullish, proved short-lived, unable to overcome the critical $0.50 support level, and remaining stuck in the $0.48 territory.
Social media sentiment, often a precursor to price movements, has not provided solace either. Santiment’s “weighted social sentiment” metric has steadily declined over the past ten days, reflecting tepid investor confidence.
Source: Coingecko
The confusion deepens when examining on-chain metrics. While the negative MVRV ratio suggests ADA might be undervalued, the sustained presence in negative territory raises concerns. Conversely, the increasing number of active addresses, signaling heightened network activity, offers a glimmer of hope for bullish investors.
Complicating the outlook is the liquidation heatmap from Hyblock. Two prominent zones add complexity: the $0.45-$0.48 region, hosting an estimated $300 million in liquidation levels, and the $0.52-$0.54 zone, carrying similar selling pressure. A drop to the former could trigger buying activity as long positions close, while the latter’s fate hinges on Bitcoin’s (BTC) movement, given ADA’s tendency to follow its lead.
ADA currently trading at $0.4809 on the daily chart: TradingView.com
Industry experts remain divided on Cardano’s future. Santiment suggests that the increased bearish sentiment might hint at an impending price bounce, while others exercise caution, citing the lack of definitive follow-through after the initial bullish market structure shift.
🐻 With #crypto market caps ranging and lacking the usual growth traders have been accustomed to since the #bullcycle began in October, there is a notable #bearish sentiment that has taken hold of #crypto discourse this week. #Bitcoin, #Ethereum, #BinanceCoin,
(Cont) 👇 pic.twitter.com/c3M4bPxlhi
— Santiment (@santimentfeed) February 5, 2024
Source: Santiment
Cardano (ADA) is currently navigating a bearish trend, experiencing a 2.93% decrease in the past 24 hours and declines of 1.13% and 10.33% over the past week and month respectively. Despite this dip, it maintains its position as the 8th largest cryptocurrency by market cap, suggesting some underlying stability.
While the short-term technical picture appears bleak, longer-term indicators offer potential for cautious optimism. The increasing number of active addresses hints at growing network activity, a potential bullish sign.
Additionally, the negative MVRV ratio, although concerning in its extended presence, could indicate undervaluation. However, this needs to be balanced against the crucial resistance zones identified around $0.54-$0.56, which could hinder upward momentum.
Overall, ADA’s future trajectory remains uncertain. Further analysis would benefit from exploring the reasons behind the recent price decline, potential catalysts for recovery, and a deeper dive into long-term fundamentals like development progress and adoption rate.
Featured image from Freepik, chart from TradingView
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
After a string of record highs, the S&P 500’s attempt at another on Thursday has coincided with a surprisingly strong report on U.S. gross domestic product in the fourth quarter.
Overall, the GDP report was “good,” said Kevin Gordon, senior investment strategist at Charles Schwab, in a phone interview Thursday. It was “probably the healthiest mix you could get at this point,” he added.
The U.S. economy so far hasn’t buckled under the Federal Reserve’s monetary tightening, which is aimed at lowering inflation to the central bank’s 2% target rate. The Bureau of Economic Analysis estimated Thursday that GDP expanded at an annual rate of 3.3% in the fourth quarter, beating economists’ forecasts.
The GDP report released Thursday showed “pretty nice noninflationary growth,” Gordon said, with the data painting a picture of a “soft landing” scenario for the economy.
Core data from the personal-consumption-expenditures price index increased at a 2% annualized rate in the fourth quarter, the same pace as in the preceding three months, according to the report. Core PCE, which excludes food and energy prices, is the Fed’s preferred inflation gauge.
“For the Fed, core PCE is a critical benchmark,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors, in emailed comments Thursday.
“As evidence mounts that the Powell Fed’s so-called ‘immaculate disinflation’ goal may be coming into view,” he said, referring to Fed Chair Jerome Powell, “the potential for interest-rate cuts accompanying the economy into a soft landing rather than outright contraction appears to be increasing.”
Investors will get a fresh reading on December inflation from the PCE index, due out before the U.S. stock market opens on Friday.
Even if “the economy is not out of the woods,” the surprisingly strong GDP report on Thursday, along with other recent economic data, should “spark a bit of optimism,” Baird said.
Stocks were mostly rising on Thursday afternoon, with the S&P 500
SPX
on track to gain for a sixth straight day, according to FactSet data, at last check. That would mark its fifth consecutive day closing at a record high.
The S&P 500 was up 0.2%, while the Dow Jones Industrial Average
DJIA
was gaining 0.2% and the technology-heavy Nasdaq Composite
COMP
was slipping 0.1%, FactSet data show, at last check.
“Consumers may have been the catalyst for the unexpectedly strong [fourth-quarter] advance, but business investment, government spending and net exports also chipped in meaningfully as well,” Baird said of the GDP report.
Estimated GDP growth in the fourth quarter was slower than the strong annual pace of 4.9% seen during the third quarter. The Fed has been aiming to cool the economy in order to bring down inflation without triggering a recession.
While housing and manufacturing have experienced weakness in the economy, the service sector has held up and the labor market has been resilient, with a historically low unemployment rate, Gordon noted.
He said he has penciled in three potential rate cuts by the Fed this year against the backdrop of easing inflation, but he added that “a lot of it hinges on the labor market.”
Meanwhile, lagging areas of the stock market may benefit should housing and manufacturing recover this year, he said, pointing to small-cap equities and cyclical stocks as examples.
Read: Tech has fueled large-cap stocks this year. It hasn’t boosted struggling small caps.
Small-cap stocks in the U.S. are down, with the Russell 2000 index
RUT
dropping 2.8% so far this year, as of Thursday afternoon trading.
By contrast, the S&P 500, a gauge of large-cap stocks that has heavy weighting in a small group of Big Tech stocks, has climbed more than 2% so far this year, according to FactSet data, at last check.
Meanwhile, companies have been reporting their fourth-quarter earnings results.
“The key for the earnings season will be what companies say about their revenue guidance,” said Gordon. “You can’t just cost-cut your way to glory.”
Polygon (MATIC) is the altcoin in focus this time around as an analyst provides an analysis of the crypto token. Based on this analysis, there is a feeling that things could soon begin to look up for MATIC.
In a video shared on the Cheeky Crypto YouTube Channel, crypto analyst JB noted that MATIC has declined following Bitcoin’s pullback. However, this move is unexpected as he believes that the crypto token’s decline to the particular retracement area sets it up nicely for an upward move. Based on his projection, MATIC could rise to between $0.87 and $1.36.
JB also factored in other things that could suggest that an upward move is imminent. He alluded to the stochastic level, which had initially suggested an overbought condition. However, it has sharply corrected indicating that there could be another push to the upside for MATIC. On the other hand, the crypto analyst was also wary of factors that could spell a move to the downside.
One of them happens to be the volumes that are seen across various cryptocurrencies. JB stated the current volumes aren’t great, and this has weakened the prices of these crypto tokens. This could potentially hinder any projection of an upward move. Another is the possibility of MATIC losing the cross above the 200 EMA, as this suggests that a dump is imminent.
Earlier in the video, JB had also emphasized the 5-wave pattern that was forming on different timeframes on the MATIC chart. The analyst seemed uncertain about whether or not the fifth wave was just forming. He noted that a push above $94.5 would suggest that the last wave is still to come. There is also the possibility that it could just be an A, B, and C pattern.
Polygon price makes its way above $0.85 | Source: MATICUSD on Tradingview.com
Still analyzing MATIC’s price pattern on the charts, JB mentioned that he was still bullish on the crypto token ahead of the imminent bull market. He had previously mentioned a target of $100 for MATIC in the next bull run, and he is still standing by the projection. In fact, JB noted that a new structure forming on the charts suggests that the crypto token could rise higher than that.
As part of this prediction, he sees MATIC being a “powerhouse” in the bull run and being one of the standout altcoins. One of the factors that he believes will contribute to MATIC’s dominance is the potential approval of the pending Ethereum Spot ETF applications. He believes that the crypto token could be a huge beneficiary, considering its role in the Ethereum ecosystem.
At the time of writing, MATIC is trading at around $0.85, down over 1%, according to data from CoinMarketCap.
Featured image from Admiral Markets, chart from Tradingview.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Shiba Inu bulls continue to struggle to hold on to gains from the last week despite losing their hold at the $0.00001 level. This shows a commitment to pushing the price of the meme coin even higher at a time when large cap altcoins are not really getting much attention. Given this, the SHIB price has traded in a tight range for a while now, something that could either make or break the price.
Crypto analyst Ali Martinez has identified a pattern that the Shiba Inu price has been trading inside recently. Using a price chart of the altcoin, the crypto analyst shows that SHIB has continued to trade inside what is known as a descending parallel pattern.
Now, descending parallel patterns only show up in an asset when there are a lot of prominent downtrends in the price of that asset over time. Due to this, the appearance of a descending parallel pattern is often very bearish for the price. However, it is not all bad news given that descending parallel patterns can also lead to a surge in the price of an asset.
As Martinez outlines in his analysis, the current pattern being exhibited by the SHIB price can end up going one of two ways. The first of these is the bullish path which could lead to a breakout. In this case, the analyst maintains that there needs to be a decisive weekly breakout which could push the price toward $0.000014.
On the flip side of this thought is the more bearish path that could signal a drop back to October levels. This happens is the price of SHIB ends up facing a region which could lead to a cascade of downward movement. In this case, the meme coin could fall back to $0.000008 once more.
SHIB price at $0.0000099 | Source: SHIBUSD on Tradingview.com
Since facing rejection at $0.00001095, the SHIB price has struggled to keep up with its gains. This makes it the level to beat if the bulls want to regain control. However, there is still a lot of resistance to the asset that it could be an uphill battle to win.
There are some things that could help to return positive sentiment for Shiba Inu among investors. For one, the Shiba Inu lead developer Shytoshi Kusama has teased what they called a “game-changing announcement.” If the announcement does turn out to be as big as expected, it could propel SHIB’s price forward.
Shibarium, the Shiba Inu Layer 2 blockchain, has also seen a lot of usage recently. This flurry of activity has increased the amount of fees generated, climbing over $1.2 million. The project’s lead dev has confirmed that these generated fees will be used to burn SHIB. As the SHIB supply is reduced, the price is expected to rally.
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
The Dow Jones Industrial Average ended November with big gains, as the ongoing stock market rally continues. The best Dow Jones stocks to buy and watch in December 2023 are Apple (AAPL), Boeing (BA), Intel (INTC), Microsoft (MSFT) and Visa (V).
X
There are clear winners — and losers — at the start of December. The top three performing blue chip stocks this year through Dec. 5 were Salesforce (CRM), Intel and Microsoft, posting rallies of 89.1%, 60.2% and 53.9%, respectively.
The worst three Dow Jones stocks through Dec. 5 were Walgreens Boots Alliance (WBA), Chevron (CVX) and Three M (MMM), with respective declines of 44.4%, 19.3% and 13.7%.
The tech-heavy Nasdaq rallied 36% through Dec. 5, and the S&P 500 gained 19%. The Dow Jones Industrial Average rose 9% year to date.
Founded in 1896 with 12 stocks, the Dow Jones Industrial Average is one of the oldest stock market indexes. There are 30 Dow Jones stocks designed to serve as a bellwether for the general U.S. stock market. Other major stock indexes include the technology-heavy Nasdaq composite and the S&P 500 index — an index of the 500 largest companies in the U.S.
| Company Name | Symbol | Closing Price | YTD Performance |
|---|---|---|---|
| Apple | (AAPL) | 193.42 | +45.8% |
| Intel | (INTC) | 41.92 | +60.2% |
| Microsoft | (MSFT) | 372.52 | +53.9% |
| Visa | (V) | 254.61 | +22.5% |
| Salesforce | (CRM) | 251.02 | +89.1% |
Amid the current stock market rally — according to the IBD Big Picture — investors should focus on stocks that show strong relative strength. These could again become 2023 market leaders if the Dow Jones Industrial Average is able to extend its recent gains.
The best Dow Jones stocks to buy and watch in December near buy points include Apple, Boeing, Intel, Microsoft and Visa.
Stock Market ETF Strategy And How To Invest
Among Dow Jones stocks in the Magnificent Seven, Apple rose 1% Thursday, adding to its recent breakout gains above a cup-with-handle entry at 192.93. Apple shares added 0.6% Friday.
According to the IBD Stock Checkup, Apple stock shows a 91 out of a best-possible 99 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths.
Aerospace stock Boeing is rapidly approaching a cup base’s 243.10 buy point. The stock rose 0.2% Thursday, just shy of the latest entry.
BA stock rallied 2.3% Friday.
Chip leader Intel is out of buy range past a double bottom’s 37.22 buy point. Shares are about 10% past that entry.
INTC stock moved up nearly 2% Friday, adding to Thursday’s gains.
Microsoft stock moved up 0.6% Thursday, holding just above a cup base’s 366.78 buy point. In recent weeks, shares rose above an early buy trigger at 346.20.
Shares rose 0.6% Friday.
Payments leader Visa is in buy range past a cup base’s 250.06 buy point. Shares are also just above an early buy trigger at 241.48.
V stock lost 0.4% Friday.
Tip: Before making investment decisions, be sure to check current market conditions, and use IBD Stock Checkup to see if your stock gets good ratings for the most important fundamental and technical criteria. To get ongoing chart analysis and trading signals, check out the unique features, stock lists and chart annotations at MarketSmith, Leaderboard and SwingTrader.
Be sure to follow Scott Lehtonen on X/Twitter at @IBD_SLehtonen for more on Dow Jones stocks and the stock market.
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Bitcoin and the broader crypto market have been gleefully declared dead more than a few times during bear markets, but some experts say it would take a genuinely extreme set of events for it to truly die.
According to 99Bitcoins — a website that, among other things, tracks how many times Bitcoin (BTC) has been declared dead by mainstream media outlets — the largest crypto by market cap has died 474 times since 2010.
Often, the proclamation is met with cheering by crypto skeptics as evidence that BTC is not a viable asset, but it might not be so simple to kill off crypto — at least according to some experts in the space.
A year ago #Bitcoin hit $69,000. One of the main reason for the spectacular rally was all the leverage that funded unprecedented #crypto advertising and speculative buying. The #FTX bankruptcy proves the entire rally was a fraud. It will never be repeated. Bitcoin mania is over.
— Peter Schiff (@PeterSchiff) November 11, 2022
Tomasz Wojewoda, head of business development at BNB Chain, is confident it would take more than a bear market or crypto winter to end BTC and the crypto market, even though it’s been a particularly harsh downswing since the all-time highs of 2021.
A bear market is when the value of crypto has fallen by at least 20% and continues to fall, while a crypto winter is a prolonged period of depressed asset prices in the market.
Wojewoda told Cointelegraph that, in his opinion, the only way BTC and the broader crypto market could die would be if something extreme happened, such as the underlying community losing interest and everyone exiting the space at once.
However, he doesn’t see this happening anytime soon. Regardless of fiascos like the FTX saga and other dramas in the space, Wojewoda believes there is always “going to be demand for crypto.”
“The crypto market, like any market in the economy, moves in waves and trends upward or downward depending on market sentiment,” he said. “The market has been through multiple bear markets, but historically, we have seen the market recover from similar trends.”
In 2011, 2013, 2017 and 2021, crypto saw huge spikes in value, only to come crashing back down to earth. So far, after each crash, the price has recovered years down the road.
Overall, this bear market and crypto winter has been particularly savage. After reaching highs of over $69,000 in 2021, BTC lost more than 60% of its value in 2022, according to CoinGecko. As of 2023, it has recovered some, but BTC is still roughly 40% down since its all-time highs.
According to Wojewoda, challenging times like these “can actually be positive for the industry” and not a sign that crypto is dying, even though it may feel like it. Specifically, he thinks market crashes can help weed out bad actors.
Related: Security audits ‘not enough’ as losses reach $1.5B in 2023, security professional says
He also sees it as a time when “strong projects focus on building and improving the user experience.”
Banking regulators appear to be trying to kill or dismantle the crypto industry, brandishing an array of lawsuits and an intimidating flood of regulatory measures. There are fears this could spell doom for the industry.
The United States Securities and Exchange Commission, led by Chair Gary Gensler, has been particularly aggressive against crypto firms. According to Gensler, his agency has filed over 780 enforcement actions in 2023, including over 500 standalone cases.
1/ Today Coinbase received a Wells notice from the SEC focused on staking and asset listings. A Wells notice typically precedes an enforcement action.
— Brian Armstrong ️ (@brian_armstrong) March 22, 2023
Crypto and BTC have survived, though. Regulations have been slow to come and, in some cases, poorly created. Wojewoda thinks some form of regulation can ultimately be a good thing for the industry and will not be the reason it dies.
“Global regulations can impact the growth of crypto; however, with more countries embracing crypto worldwide, I don’t think this will be a reason for crypto to ‘die off,” he said.
“Regulation in the industry is a good thing. It keeps users safe, and a clear framework enables the industry to build around it.”
Wojewoda is convinced the crypto market will reach the other side of this crypto winter and beyond. He thinks it will likely survive as a concept, but not all projects and currencies will make it long-term.
According to Exploding Topics, there are over 10,500 different cryptocurrencies in existence as of November 2023. However, it’s estimated that only 8,848 are still active in the space, with the others dropping off or dying.
“Projects that didn’t have a real-life use case died off, but the ones that truly make an impact have not only survived but thrived,” Wojewoda said.
“There are many things that can impact the trajectory of crypto, such as sentiment, regulation and other factors — for example, the Bitcoin ETF filing and upcoming Bitcoin halving,” he added.
New Research note from me today. We still believe 90% chance by Jan 10 for spot #Bitcoin ETF approvals. But if it comes earlier we are entering a window where a wave of approval orders for all the current applicants *COULD* occur pic.twitter.com/u6dBva1ytD
— James Seyffart (@JSeyff) November 8, 2023
In the long run, along with weaker hands dropping off, Wojewoda believes it’s not “out of the realm of possibility” that some crypto will be replaced by new, better tech.
He doesn’t think BTC will be among the casualties because its network effect and user base give it a significant advantage over other cryptocurrencies.
“Bitcoin will likely remain as the most popular crypto in terms of market share. Where I think we will likely see more movement in the ranks is among cryptocurrencies that offer real-world applications,” Wojewoda said.
“These projects have applications beyond digital currencies, and the tech is continuously evolving, finding new use cases and applications for the real world.”
Related: Massive’ crypto use cases to surface by 2030
These applications are one of the reasons Wojewoda thinks the market will endure long term. While not all will make it, the broader crypto market and BTC will survive.
Markus Thielen, head of research and strategy for digital asset investment firm Matrixport, is also skeptical that a bear market or crypto winter poses a genuine threat to the crypto market and BTC.
Speaking to Cointelegraph, Thielen said that while many people exit the space during bear markets, it’s a normal part of the process, not a sign of crypto’s impending death.
“Many people have excited the crypto industry during the last year, as those firms have expanded near the top of the last bull market,” he said.
“Without sufficient revenues and additional capital injections from venture capital funds, those crypto firms have to right-size their companies.”
Right-sizing a company is the process of restructuring to make profits more efficiently and meet updated business objectives. Right-sizing usually involves reducing workforces, shifting around upper management and other cost-cutting measures.
“As long as there is value being sent around electronically, crypto has a value proposition that is difficult to match with the traditional banking rails,” Thielen added.
So far, there have been four bull markets — 2011, 2013, 2017 and 2021 — and record numbers of people have entered the space each time, only to disappear when the bears strike. A bull market is characterized by rising prices and investor optimism.
Related: ‘Strap yourselves in’ — Bull market coming early 2024, say crypto exchange heads
According to Thielen, each bull market is being built upon a new narrative, which will continue to be the case. He says there will likely be another narrative for a fifth bull market very soon.
“With regulators approving Bitcoin futures in 2017 and potentially a Bitcoin ETF in 2024, the regulatory level playing field is cemented,” Thielen said.
“I can not imagine Bitcoin ever disappearing, as the idea of Bitcoin plays into the hands of human fallacy.”
Bitcoin (BTC), the largest cryptocurrency on the market, has again failed to consolidate and reach the $38,000 level for the third time, as it is currently experiencing a 3% pullback. This has led the community to speculate that a significant retracement may occur before the bullish momentum resumes and the next uptrend begins.
However, renowned crypto analyst Adrian Zduńczyk has recently shed light on Bitcoin’s potential next target of $50,000. Zduńczyk’s analysis considers several crucial factors, including the prevailing bullish market sentiment, the ongoing uptrend, the short-term outlook, miner sentiment, and seasonal trends.
Zduńczyk notes that the cryptocurrency industry is in a bull market, with Bitcoin reaching a new 52-week high close and experiencing the third wave of the bullish cycle. The correlation between Bitcoin and the S&P 500 has risen, indicating a favorable environment for Bitcoin. High time frame trends are also rising.
Zduńczyk identifies key macro support levels for Bitcoin at $29,000 and $27,000, highlighting growing demand fueled by the anticipation of the approval of spot Bitcoin exchange-traded funds (ETFs) and the upcoming halving event expected in April 2024.
Notably, the daily chart for BTC remains in an uptrend, according to Zduńczyk. He points to a target of $40,000, supported by the appearance of a “golden cross” pattern.
Furthermore, Zduńczyk believes that the rising Simple Moving Average (SMA) 200 serves as “irrefutable evidence” of a dominant bull market since January. These indicators suggest a continuation of the upward trajectory for Bitcoin.
Zduńczyk also identifies key support levels at $35,000 to $35,800, emphasizing that a bullish sentiment prevails as long as Bitcoin remains above these levels.
Currently, Bitcoin is ranging between $35,500 and $38,000, Zduńczyk notes that the momentum bands are widening, indicating an increase in volatility. The rising 50-day Average True Range (ATR) trend supports this observation.
Fear & Greed Index stands at 69, indicating a mixed sentiment among market participants. Miners, on average, are enjoying a profit increase of 23%. Zduńczyk maintains a positive outlook based on these factors.
Regarding seasonal trends, October demonstrated a gain of 27%, exceeding the average performance. Historically, November has been the best month for Bitcoin, which has an average gain of 43%, with a target of around $50,000. Notably, December typically adds 7% to November’s closing price.
Currently, BTC is trading at $36,400, reflecting a 5% and 22% profit over the past fourteen and thirty days, respectively. The focus now shifts to whether BTC’s price can maintain its crucial support levels and sustain its bullish uptrend, potentially reaching the $50,000 milestone supported by historical patterns.
Featured image from Shutterstock, chart from TradingView.com
How do you define a stock market opportunity? Is it a windfall, a piece of luck, or the result of careful planning, a strategy to make the most of any opening?
The savvy investor seeks out the latter, looking for stocks that offer inducements to entry, be it a high upside or a depressed share price or a recent positive analyst review – or better yet, a combination of all three.
So there’s a profile. We’ve used the TipRanks database to look up two stocks that fit it – stocks with Strong Buy consensus ratings, plenty of upside potential, and recent thumbs up from the analyst corps. And, while these stocks have plenty of positives in the profile, each one has also experienced steep share price losses in recent months. Let’s take a closer look.
Sunnova Energy International (NOVA)
We’ll start in the residential solar installation niche with Sunnova Energy. This firm is one of the leaders in the US residential solar industry, where its operations include everything from installing rooftop solar panels to setting up the home power system and bringing in power storage batteries. Sunnova also backs up its solar installations with repairs, modifications, and replacement parts available to customers as needed. On the sales and financial side, the company can provide financing options for its customers.
Founded in 2012 in Texas, Sunnova now has a presence in 46 US states and territories and boasts more than 348,000 customers on its books. The company has a nationwide network of more than 1,300 dealers, sub-dealers, and builders engaged in marketing and building out its solar installations, and in its last reported quarter, 2Q23, the company added more than 39,000 customers. As of June 30, Sunnova’s business was running strong, and the company expects to gain between 135,000 and 145,000 new customers for all of 2023.
However, despite its strong market presence and growth trajectory, Sunnova’s shares have experienced a significant decline since reaching their peak value in July. The drop has been substantial, marking a decrease of 62% from the highest point.
Sunnova reported its third-quarter earnings last week, which, while missing analyst expectations, came with an optimistic outlook for FY 2024. The company reported revenues of $198.39 million, marking a year-over-year increase of 32.8%, but $3.6 million below the forecasts. The bottom line figure, an EPS loss of $0.53, was 16 cents below expectations. Nevertheless, Sunnova’s positive outlook shines through as the company initiated FY 2024 adjusted EBITDA guidance, ranging from $350 million to $450 million, well above the analyst consensus of $332 million.
It is interesting to note here that late last month, Sunnova entered a deal with the US Department of Energy for partial loan guarantees up to $3 billion. The government support will help back the company’s Project Hestia, a solar loan channel for disadvantaged homeowners and communities in the US market.
UBS analyst William Grippin, looking at Sunnova, is impressed by the company’s prospects for boosting its market share, as well as its exposure to US government support and funds. He writes, “We see NOVA as well-positioned to take market share driven by increasing demand for third-party-owned (TPO) residential solar systems which have relatively more favorable tax treatment under the Inflation Reduction Act (IRA). In our view, the decline in NOVA share price, driven by near-term market growth concerns and rising rates, provides an opportunity on a 12-mo forward basis. We estimate that NOVA’s current net contracted customer value (NCCV) is ~$13/ sh and forecast an incremental ~$6/sh of value creation in 2024E.”
Grippin follows up his bullish stance with a Buy rating and a $16 price target that implies a one-year upside potential of 82%. (Watch Grippin’s track record.)
Overall, Sunnova’s 20 recent analyst reviews include 15 Buys and 5 Holds, for a Strong Buy analyst consensus rating. The stock’s $8.79 trading price and $20.31 average price target combine to suggest a robust 131% upside on the one-year horizon. (See Sunnova stock forecast.)
Exact Sciences (EXAS)
Next up is Exact Sciences, a medical tech firm, a specialist in developing early testing technology for cancer screening. The company is dedicated to improving cancer treatment – and prevention – through accurate and timely early diagnostic testing. The company has a lineup of test kits for various cancers, particularly colorectal cancer and liver cancer, and backs that up with several tests designed to find predispositions in individual patients’ genetics.
On the practical side, the company has been marketing its Cologuard at-home colon cancer screening test since 2014. The test is based on stool-DNA and can detect colon cancer at early stages when treatment is easier and more effective. The company also has the Oncoguard Liver test on the market, a blood-test detection kit for HCC, hepatocellular carcinoma, the most common form of liver cancer. Liver cancers are particularly dangerous, and early detection is vital.
Also available are Exact Sciences’ Oncotype test, a standard-of-care test for breast cancer, capable of predicting not just the recurrence of invasive breast cancer but also the likely benefit of chemotherapy treatment. The company’s OncoExTra test is used in tumor profiling, based on whole exome and whole transcriptome sequencing and an extensive panel of approximately 20,000 genes. The test kit is one of the most comprehensive molecular tests currently available for cancer patients and treatment providers.
In an announcement at the end of August, Exact Sciences made public that the OncoExTra test has been selected as a tool in national clinical trials funded by the National Cancer Institute, the ComboMATCH trials.
This company’s success with its strong portfolio of testing products has led to a gradual increase in revenue over the past few years. The last set of financial results, from 2Q23, showed a top line of $622 million, up 19% year-over-year and nearly $21 million above the estimates. The company’s quarterly EPS, while a loss of 45 cents per share, was 6 cents per share better than had been expected. Notably, the company has revised its full-year revenue guidance, now projecting a range of $2.441 billion to $2.466 billion, up from the previous estimate of $2.38 billion to $2.42 billion. The consensus estimate among analysts stands at $2.42 billion.
Despite these strengths, it’s worth noting that EXAS shares have experienced a 40% decline from their peak in July.
Analyst David Westenberg, of Piper Sandler, notes the share price fluctuations, but also the company’s solid asset in Cologuard – and sees the current price as a good time to buy.
“With strong Cologuard growth (we estimate 29% YoY in 2023) and a clear path to five+ years growth rates of above 10%, we think the pullback since highs in July represent a pretty compelling entry point. Over the next three years, we model adj. EBITDA to end up at $518M (in 2025E), but we think there could be upside to our estimates,” Westenberg opined.
“Meanwhile,” the analyst added, “we think the company will be only lightly impacted by macroeconomic factors or from regulatory factors such as LDT regulations. Following brutal market selloffs in the lab space, we’re picking what we see as the highest quality company in the space. Lastly, while we have concerns with both fecal and blood based competitors, we think the selloff likely reflects the increased concern and that the current entry point is too compelling.”
These comments support Westenberg’s Overweight (i.e. Buy) rating on EXAS, and his price target, at $90, implies a 35% upside potential for the coming year. (Watch Westenberg’s track record)
Overall, the bulls are running for Exact Sciences, and the 13 recent analyst reviews include 11 Buys vs. just 2 Holds for a Strong Buy consensus rating on the stock. The shares are priced at $59.06, and the average target price of $103.45 is more bullish than the Piper Sandler view, suggesting a 12-month gain of 75%. (See EXAS stock forecast)
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.
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.
“ It is naïve to assume that the largest credit-fueled bubble in half a century can continue indefinitely or be deflated without pain. ”
Talk show pontifications notwithstanding, the trajectory of the world’s two most serious geopolitical conflicts — Ukraine and the Middle East — is unpredictable. In the Israel-Hamas war, the potential for serious escalation is not trivial. These and other uncertainties are aggravating known stresses on the global financial system.
Consider inflation. Slowing price rises have been driven by easing demand, as consumers’ COVID pandemic savings dwindle and energy and food-price costs decline. While several factors suggest that inflation may stabilize at around current levels, it could increase for several reasons.
First, on the demand side, strong employment will support consumption. Government deficits, currently around 5% and projected to grow, will add to demand. The energy transition, subsidies for strategic manufacturing, semiconductors and war-footing defense spending, will continue to boost spending.
Input costs show no signs of easing. While volatile, energy prices remain under upward pressure due to production cuts by Saudi Arabia and Russia to keep prices at levels which meet their revenue targets. Fuel hungry military activities will influence demand. The threat of an 1974-like oil embargo should not be discounted.
Food prices are affected by geopolitical conflicts, reducing supply from major producers, extreme droughts and floods as well as export limits as nations prioritize their domestic needs. Commodity prices, such as for copper, will be underpinned by demand for transition critical minerals and armaments. There are looming shortages due to inadequate investment because of, in part, efforts to meet ESG targets.
Manufactured goods prices may fall due to excess Chinese capacity but services, which are a large portion of advanced economies, will reflect rising labor costs. Moreover, an aging population and skills shortages will drive higher salaries, in nominal but not real terms, generating a wage-price feedback loop.
Housing also is affected. With affordability at record lows, strong housing markets will feed inflation via real or imputed rents. Rising insurance costs due to increased extreme weather risks will flow into rising prices.
Inflation also is found in the tit-for-tat China-U.S. trade restrictions on technology and rare earths, which impacts supply chains. Relocating production facilities to enhance U.S. sovereignty will contribute to higher costs because of inefficient operational scale and higher inventories.
Second, public finances. Government spending, which will be affected by wars, is not being matched by higher tax revenues, leading to larger deficits and increased borrowing. U.S. government debt, for example, is forecast to rise to 107% of GDP by 2029 from its current 97%, exceeding the 1946 post-World War II historical peak of 106%.
“ Geopolitical conflict will divide the world, driving a shift away from the U.S. dollar. ”
Third, de-dollarization. Geopolitical conflict will divide the world, driving a shift away from the U.S. dollar
DX00,
for trade and reserve assets to reduce exposure to U.S. sanctions and asset seizures. While unlikely to be replaced in the near term, the increased use of non-dollar currencies will fragment global capital movement. The U.S. will face increasing difficulties in financing its budget and trade deficit, now a combined 8% of GDP, from foreign investors, who hold one-third of US government debt, increasing borrowing costs.
“ The effect of higher rates on financial stability and asset prices is underestimated. ”
Current interest rates reflect a long overdue normalization. Central banks also need scope to cut rates in an emergency. Barring a severe downturn or financial crisis, rates could remain at current levels for a prolonged period.
The effect of higher rates on financial stability and asset prices is underestimated. The banking issues revealed in March and April of 2023 have not disappeared. Long-term rates now are above levels when Silicon Valley Bank collapsed. Mark-to-market losses on bond holdings are now higher at around $9 trillion of losses. Deposit outflows are continuing. Loan losses from defaults as companies are forced to refinance with higher borrowing costs lie head. Write-offs would be compounded if the economy slows.
Recoveries in stocks, albeit narrowly based, and residential property have increased the levels of overvaluation as measured by fundamental measures. Weaker businesses with low- or no cash flow and reliant on constant capital infusions are especially vulnerable. Other areas of vulnerability remain, particularly among venture- and early stage capital, private markets, leveraged finance, shadow banking and structured products.
In addition, problems in commercial real estate and funds unable to navigate choppy trading conditions may foretell troubles ahead.
The tested meme of “bad news is good news,” with its promise of lower rates and additional liquidity, ignores this altered environment. The reality is that governments have unsustainable debt, and central banks must deal with bloated balance sheets and large losses on existing QE bond purchases. Policymakers are juggling accelerating geopolitical issues and the need to contain inflation.
It is naïve to assume that the largest credit-fueled bubble in half a century can continue indefinitely or be deflated without pain. Higher interest rates, if they continue for long enough, will force an adjustment, one way or another, to popular investments that were made based on comically low costs of capital.
Satyajit Das is a former banker and author of A Banquet of Consequences – Reloaded ( 2021) and Fortunes Fools: Australia’s Choices (2022)
More: 70% chance Israel-Hamas war spreads beyond Gaza, threatening oil, strategist warns
Also read: What Israel-Hamas war means for gold as investors seek safety
