Investing.com -- Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week.
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Fortinet
What happened? On Monday, Baird downgraded Fortinet Inc (NASDAQ:FTNT) to Neutral with a price target of $112.
*TLDR: FTNT soars and stumbles, still beats IGV ETF performance. Baird: cautiously impressed, mildly confused.
What’s the full story? Baird is here to talk about FTNT, the stock that’s been oscillating between “rocket ship” and “meh” like a crypto bro trying to explain utility tokens. In 2024, FTNT was the superstar of Baird’s coverage, soaring 61% while the IGV index trailed at a pedestrian 23%.
But January? Ooof. FTNT transformed into the person who trips at the starting line, becoming one of Baird’s worst performers despite still edging out the iShares IGV ETF (+7% vs. +3%). Now, Baird notes that analysts have trimmed CY25 revenue estimates by ~4%, but hey, low-teens growth is still on the table!
With operating and FCF margins flexing at 30%+, FTNT is presumably out there shopping for growth—organic or via M&A—like it’s Black Friday. The brokerage is “tactically cautious,” which is Wall Street for “we’re watching but not touching the hot stove yet.” Meanwhile, FTNT is up ~78.5% over six months (crushing iShares IGV ETF by ~50.2 ppts), though sentiment has “slightly moderated” over three months. Slightly. As in, it’s only up ~28% and beating IGV by ~16.5 ppts. YTD? +6.8% vs. IGV’s +3%.
So, basically, FTNT is still winning—just not as dramatically as it once did. Baird is impressed, confused, and cautiously optimistic.
AMC Entertainment
What happened? On Tuesday, Roth/MKM upgradedAMC Entertainment Holdings Inc (NYSE:AMC) to Neutral with a $3.25 price target.
*TLDR: Box office revival offsets AMC’s heavy debt. Cash flow may recover by 2025.
What’s the full story? Roth upgraded AMC from Sell to Neutral. Why? Well, the box office is apparently on the verge of a two-year renaissance, debt is being politely deferred like a student loan, and operating cash flow might—just might—turn positive in 2025, for the first time since pre-pandemic days.
Of course, AMC is still coughing up $390 million in interest payments and shelling out $225 million in capex, so Roth’s optimism comes with a generous side of skepticism. Free cash flow will likely stay negative in Q1 2025, but Roth assures us it’ll recover as the year progresses. Sure, and I’ll start going to the gym tomorrow.
AMC has managed to raise $180 million in equity sales, which Roth says will mostly offset the cash burn for the quarter. They predict cash will bottom out at $430 million before rebounding to $600 million by year-end. Valuation? Still spicy at 8.5x 2025 EBITDA, but Roth insists the risk/reward balance is “less terrifying” than it’s been.
AMC, it seems, is a company that’s not quite dead yet, but Roth’s upgrade feels less like a ringing endorsement and more like a cautious nod.
Advanced Micro Devices
What happened? On Wednesday, Citi downgraded Advanced Micro Devices Inc (NASDAQ:AMD) to Sell with a $110 price target.
*TLDR: AMD beats Q4, but risks loom. Citi downgrades, cuts estimates.
What’s the full story? Citi notes AMD delivered decent Q4 results, with revenue of $7.66 billion (up 12% QoQ), slightly beating consensus, driven by strong PC CPU sales. Gross margins and EPS also edged past expectations, but the bank sees cracks in the story. AMD’s Q1 guidance, while above consensus, hints at a sequential decline, and, crucially, the company offered no AI revenue outlook, with expectations of flat-to-down AI sales in 1H25. Citi flags potential CPU inventory builds, sluggish margin leverage, and eroding transparency as red flags.
The bank lowers estimates, cutting CY25 and CY26 revenue and EPS forecasts, citing weaker AI and CPU sales. It downgrades AMD from Buy to Neutral, slashing the price target to $110, reflecting a multiple compression driven by slowing AI growth, margin dilution, and inventory risks. Citi’s message? AMD’s shine is fading.
Li Auto
What happened? On Thursday, Macquarie upgraded Li Auto Inc (NASDAQ:LI) to Outperform with a $29 price target.
*TLDR: Li Auto stumbles, but risks seem priced. Await BEV (Battery Electric Vehicle) SUV clarity.
What’s the full story? Macquarie watches as Li Auto stumbles through Q4, volumes slipping below guidance and revenue at risk from a higher mix of cheaper L6/L7 models. The firm cuts FY25 volume and sales estimates by 3%, trims its target price, and upgrades the stock to Outperform, betting the worst is priced in. Net profit might beat expectations, but revenue likely misses, and January sales—down 49% month-on-month—still outpace most premium EV peers. Li Auto’s EREV and brand strength keep it afloat, but Macquarie eyes new competitors in 2025 and the lingering mystery of BEV SUVs.
The firm sees Li Auto as a “show me” story, waiting for clarity on BEV SUV timing, specs, and market reception. Catalysts like high-end demand recovery, BEV SUV orders, and ADAS (Advanced Driver Assist Systems) improvements could reignite interest, but for now, caution reigns. Macquarie’s verdict: risks are priced, but the proof will come from the road.
Doximity
What happened? On Friday, Leerink upgraded Doximity Inc (NYSE:DOCS) to Outperform with a $90 price target.
*TLDR: DOCS thrives on profitability, growth, and portal adoption. Momentum and margins justify upside potential.
What’s the full story? Leerink acknowledges it might be late to the party but is now firmly on board with DOCS’ growth train. The analysts highlight core growth trends fueled by better attach rates on early customer buys and long-term portal expansion, which they see driving a positive reversion cycle. This should consistently boost EBITDA, given DOCS’ lean overhead and significant incremental margins on revenue beats. While the stock’s multiple screens higher than healthcare IT peers, its adjusted growth multiple versus broader tech suggests the valuation is justified—with room for upside. The analysts have stopped fighting the trend, pointing to a stronger baseline, new products, AI investments, and the portal as green shoots for sustained growth.
What do the analysts like? DOCS’ profitability profile remains a standout, with a staggering 81% sequential incremental EBITDA margin last quarter. Demand is robust, with top 20 customers growing 21% year-over-year, and 114 customers now spending over $500K annually—up from 94 in FY3Q’24. The CY25 selling season is off to a strong start, featuring increased multi-module buying, four $10MM-plus brands, and a first-ever $15MM-plus brand. Newer products—Point of Care and Formulary—are growing over 100% and driving 20% of new sales. Portal adoption, now at 50%, continues to outpace corporate growth, with the remaining 50% expected to onboard in CY25. Leerink sees momentum, margin, and more.
