WallStreetBets Stock Tips October Week 1 Roundup

Reddit group WallStreetBets has built a space for itself in a market otherwise crowded by institutional investors. The group has been a force to reckon with.

While many of the WallStreetBets stocks are meme names, some others look good buys. Here are five stocks from the group that look good buys.

1. IronNet (NYSE: IRNT)

IronNet is a cybersecurity company that went public earlier this year through a reverse merger with LGL Systems Acquisition (DFNS). The stock rose to an all-time last month as Reddit traders went on a buying spree, triggering a short squeeze. However, it has since come down and has especially looked weak this week.

WallStreetBets members are mixed on IronNet stock

WallStreetBets members are mixed on IronNet stock. The company would see a dilution post the conversion of warrants which has been making several traders apprehensive. However, the stock looks like a good buy after the crash. Wall Street analysts have also been bullish on this WallStreetBets stock. Needham initiated a coverage on IRNT with a buy rating and $29 target price and called the stock an “early leader” in collective defense.

Jefferies also initiated a coverage on the stock with a hold rating and a $27 target price. The outlook for cybersecurity stocks like IronNet looks positive. The company has high gross margins and a high share of recurring revenues which makes it even more attractive. Analysts expect the company’s revenues to rise 43.5% in the fiscal year 2022 and 141% in the fiscal year 2023. The growing cybersecurity threats would mean more sales for the company.

IRNT is a meme stock but a good WallStreetBets stock to buy

Overall, while IRNT is a WallStreetBets stock and the recent price action has mimicked that of meme shares, it is a fundamentally strong company with a positive long-term forecast. After the crash, IRNT looks like a good buy. If you are looking at a WallStreetBets stock in the cybersecurity industry, IRNT would fit the bill.

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2. Palantir (NYSE: PLTR)

Palantir is another good WallStreetBets stock to buy in October. The stock is up only about 3% for the year and is down sharply from the peaks. However, after the fall, it looks like a good WallStreetBets stock to buy.

Palantir’s second-quarter revenues increased 49% year-over-year to $376 million. The company’s commercial revenues in the US rose 90% during the period. During the quarter, the company closed 62 new deals valued above $1 million. Out of these 30 deals are above $5 million while 21 deals are above $10 million.

Palantir said that it expects annual revenue growth in excess of 30% between 2021 and 2025. The projected growth looks strong and the company might surprise on the upside in terms of growth looking at the growing demand for data analytics, both from the public and the private sector.

Palantir is a WallStreetBets stock liked by Cathie Wood

While Wall Street fund managers don’t have similar views as WallStreetBets on most stocks, Cathie Wood of ARK Invest also likes Palantir, like Reddit traders. Wood is known to identify disruptors early and to her credit she has been an early investor in multi-baggers like Tesla and Square. Jim Cramer also has a positive view of PLTR stock and called it a “very good company.”

Palantir stock price forecast

Of the eight analysts polled by CNN Business, only one has rated PLTR as a buy though. It has four hold and three sell ratings. The stock’s median target price of $25 is a premium of 4%. However, the street high target price of $31 is a 29% premium over current prices.

That said PLTR looks like a good WallStreetBets stock to buy and play the data analytics industry. The company has a positive long-term forecast and could be a multibagger for patient investors. The stock trades at an NTM (next-12 months) EV (enterprise value)-to-EBITDA multiple of 95x which seems reasonable considering the strong growth outlook and scarcity premium for quality data analytics companies.

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3. Disney (NYSE: DIS)

Disney is also currently a popular WallStreetBets stock. The stock has looked weak in 2021 and is down almost 5% while the broader markets are still up in double digits. Last month, the company had provided soft guidance for streaming subscribers in the current quarter which dampened sentiments.

Disney has been a new entrant into the streaming industry but has built a strong franchise. It has 116 million subscribers for Disney+ in the most recent quarter and the management expects them to rise to 230-260 million by the fiscal year 2024. The reopening of its Parks would also help propel earnings and profitability.

WallStreetBets members on Disney subscriber growth

WallStreetBets members have also been discussing the tepid fourth-quarter guidance provided by Disney CEO Bob Chapek. Meanwhile, Credit Suisse reiterated its outperform rating and $218 target price on Disney after the guidance.

“Disney lost $14B of market cap on Tuesday, almost entirely when CEO Bob Chapek made his business update commentary. That amounts to ~$5 million for every Disney+ Hotstar subscriber we removed from our model, subscribers that are clocking in at $0.45/mo of subscription revenue – we removed $4m of revenue from F4Q21 and $16m of revenue from FY22 due to the 3m Hotstar sub shortfall,” it said in its note.

Wall Street analysts are also bullish on Disney stock, and it has 24 buys and five hold ratings. The stock’s median target price of $210 is a premium of 24%. Overall, DIS stock is a bet on the company’s pivot towards streaming and the Parks reopening.

While meme names like AMC are more popular WallStreetBets stock, Disney looks like a fundamentally strong long-term stock on Reddit. The recent fall has only made the stock attractive. The stock trades at an NTM EV-to-sales multiple of 4.4x which is not much higher than the three-year average of 4.1x.

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4. Virgin Galactic (NYSE: SPCE)

Virgin Galactic stock rose sharply yesterday after the FAA completed its investigation into its maiden space flight and allowed it to resume commercial flights. The stock was popular on WallStreetBets in the first quarter also. Back then, it had risen as high as $62.80 but now trades way below those levels.

WallStreetBets members are bullish on SPCE stock after FAA approval

The FAA approval has made some WallStreetBets members bullish on SPCE stock. The outlook for space travel looks positive and Virgin Galactic looks in a prime position to capture market share given its first-mover advantage.

Wall Street analysts are also mixed on the stock but consensus estimates call for an upside of 19% from these levels. As space travel takes off over the next decade, SPCE could be one WallStreetBets stock that you might want to own.

5. Tilray (NYSE: TLRY)

Tilray is another good WallStreetBets stock to buy. The stock has looked weak after the merger and is down sharply, in line with other cannabis stocks. However, its geographically diversified operations make TLRY a good cannabis stock to buy. The company is looking to grow its business both organically as well as inorganically.

It has also made a foray into the US markets after the investment in Medmen. The company would increase the stake further in the future which will provide it a strong foothold in the US markets. The stock’s valuations also look quite reasonable after the fall and the NTM EV-to-sales multiple is just about 7x.

TLRY is a popular cannabis stock on WallStreetBets

The company has set itself a target of $4 billion in revenues by 2024. This would mean revenues rising four-fold from these levels. Now, while some of this growth would be organic, the company would also have to go for acquisitions. Tilray has been looking to sell more shares which would lead to an increase in the outstanding share count. However, if the management can come up with accretive acquisitions, it would add shareholder value.

If you are looking at a WallStreetBets stock to play the cannabis industry, TLRY looks like a good bet.

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