September got off to a tough start for the U.S. stock market, with some economic indicators showing signs of weakness.
Ignoring the short-term noise, investors looking to pick stocks can consider the recommendations of Wall Street’s top analysts. These professionals conduct research and evaluate a company’s ability to weather headwinds and grow over the long term.
With that in mind, here are three stocks that top Street pros favor, according to TipRanks, a platform that ranks stocks based on analysts’ past performance.
Planet Fitness
This week’s first Planet Fitness (PLNT) is a franchisor and operator of more than 2,600 fitness centers. The company recently reported better-than-expected second quarter financial results and reaffirmed its full-year guidance. Management attributed the second quarter performance to the strength of the company’s asset-light franchise model.
Recently, Baird analyst Jonathan Komp reaffirmed his Buy rating on PLNT shares with a price target of $92.00. The analyst gave the stock a new “Strong Fresh Pick” designation as he is optimistic about the company’s efforts under new management and other growth drivers.
Analysts noted that management has been working to increase the return on invested capital on new units through higher prices, reduced capital expenditures and longer renovation periods. CEO Colleen Keating aims to further strengthen the company’s position by strengthening leadership, improving member experience and strengthening marketing efforts.
In addition to new management, Komp cited several other reasons to be bullish, including Planet Fitness’s strong consumer value proposition and a high-margin franchise model that is expected to hold up in a tough macro environment.
“With expanding cash return capabilities and a thrust horizon to 2025, the shares are well positioned in a slower growth environment,” the analyst added.
Komp is ranked 266th out of the 9,000+ analysts tracked by TipRanks, and his ratings have produced profits 56% of the time, with an average return of 15.1%. (See Planet Fitness stock chart on TipRanks)
Ross Store
Transition to off-price retail chains Ross Store (ROST). Retailers reported strong second-quarter results as they lured customers with enhanced value offers. Ross Stores raised its full-year profit outlook, reflecting demand for discounted products and greater efficiency.
Following the strong second-quarter results, TD Cowen analyst John Kernan reaffirmed his buy recommendation on Ross Stores shares and raised his price target to $185 from $173. The analyst expects the company’s strengthened merchandising efforts to help improve its outlook for the second half of the year.
Kernan highlighted management’s efforts to strengthen Ross Stores’ value offering and an increased mix of branded merchandise across certain categories, such as women’s clothing and beauty products, have boosted the company’s same-store sales over the past few quarters.
Kernan noted that the company’s merchandising efforts and cost reductions across its distribution, logistics and store network are also contributing to the company’s margins and revenue. Overall, analysts expect ROST’s operating margins to expand from 11.3% in fiscal 2023 to more than 13% by fiscal 2028.
“ROST’s valuation is still too cheap relative to TJX (given similar growth and ROIC profiles), which could give ROST some upside in the near term,” Kernan said.
Kernan is ranked 795th out of more than 9,000 analysts tracked by TipRanks. His ratings are successful 54% of the time, generating an average return of 7.8%. (See Ross Stores technical analysis on TipRanks)
Sentinel One
Finally, cybersecurity providers Sentinel One (S) The company reported market-beating financial results for the second quarter of fiscal 2025. This is the first time the company has achieved positive net income and earnings per share on an adjusted basis. SentinelOne also raised its full-year revenue outlook, buoyed by strong momentum and the strength of its AI-powered Singularity platform.
Following the results, Baird analyst Shrenik Kothari reiterated his buy recommendation on SentinelOne shares with a $29 price target, pointing to the company’s strong second quarter performance and 32% growth in annualized recurring revenue, driven by new business from new products in the areas of cloud, data, and AI, as well as strong growth in the existing customer base.
Kothari added that despite the challenging macro environment, the company expects net new ARR to improve in the second half of the year and has raised its full-year outlook. The revised outlook reflects stronger pipeline retention and improved order rates, supported by notable progress in the company’s go-to-market strategy.
Comments on how SentinelOne expects to benefit from a rival’s IT outage in July CrowdstrikeKothari believes management is taking a “cautious” stance, as management has highlighted the resiliency of SentinelOne’s service and noted that sentiment has changed since the outage, leading to increased interest in the company’s platform from some of the world’s largest organizations.
“Overall, S has done well in transitioning to a new operating model and with a strong RPO. [remaining performance obligation] “The growth rate (40 percent year-on-year) suggests demand will sustain and the cautious outlook may pick up,” Kothari said.
Kothari is ranked 233rd out of more than 9,000 analysts tracked by TipRanks. His ratings have produced profits 69% of the time, with an average return of 22.1%. (See SentinelOne hedge fund trading activity on TipRanks)
