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This past week showcased the turbulence in the trading market, heavily influenced by the fluctuating tariff discussions from the Trump administration. Even with a rally on Friday, major stock indices ultimately ended the week with losses.
In light of this tumultuous environment, savvy investors are looking to insights from top Wall Street analysts to strategically enhance their portfolios with stocks that both weather short-term challenges and hold potential for long-term gains.
Here, we present three stocks that have garnered attention from leading analysts as highlighted by TipRanks, a service that evaluates analysts based on their historical performance.
Zscaler
First on our list is Zscaler (ZS), a premier name in cloud-driven cybersecurity. Their innovative Zero Trust Exchange platform is pivotal in safeguarding users, devices, and applications against cyber threats and data breaches. Zscaler’s latest fiscal quarter results surpassed market expectations, driven by the rising trend toward Zero Trust solutions and advancements in artificial intelligence.
Following Zscaler’s impressive quarterly outcome, TD Cowen analyst Shaul Eyal maintained a bullish stance by reaffirming a buy rating with a price target set at $270. Eyal pointed out key factors contributing to the company’s robust performance, including a refreshed marketing approach, declining sales attrition for the second quarter in a row, and a boost in sales efficiency, which is expected to improve in the latter half of fiscal 2025.
The growing influence of AI was specifically mentioned as a catalyst for demand and innovation, with annual contract values from their AI Analytics segment nearly doubling year-on-year. Zscaler aims to achieve an annual recurring revenue milestone of $3 billion by the conclusion of fiscal 2025.
When discussing Zscaler’s federal contracts, Eyal noted the company works with 14 out of 15 U.S. cabinet agencies and anticipates positive impacts from the initiative launched by Elon Musk’s Department of Government Efficiency, which emphasizes cost-saving and operational efficiencies. He also noted a significant uptick in major clients, with those generating an annual recurring revenue above $1 million increasing by 25% compared to the previous year.
“By blending organic growth with strategic acquisitions, ZS has broadened its capabilities and extended its market reach,” remarked Eyal.
Ranking No. 18 out of over 9,400 analysts noted on TipRanks, Eyal has shown profitable predictions 65% of the time, yielding an impressive average return of 23.9%. For more on investment trends, see Zscaler Hedge Funds Trading Activity.
Costco Wholesale
Next up is Costco Wholesale (COST), a well-known membership-based warehouse retailer that delivered somewhat mixed results for its second quarter of fiscal 2025. While revenue grew beyond expectations fueled by increased comparable sales, the company’s earnings fell short of forecasts.
Jefferies analyst Corey Tarlowe attributed the slight earnings miss to slower-than-anticipated growth in the Q2 gross margin, influenced by currency fluctuations and other variables. Nevertheless, he expressed confidence in Costco’s strong comparable sales and rising membership fees.
Despite market challenges faced by other retailers, Costco reported an impressive 8.3% growth in adjusted comparable sales, primarily driven by strong performance in non-food categories. The analyst also pointed to increased traffic and higher average spending per customer as major drivers of the positive trends in the U.S.
Tarlowe identified further expansion potential for Costco’s warehouse network and emphasized the company’s relatively low vulnerability to the tariffs announced by the Trump administration. Interestingly, it’s noted that only about a third of Costco’s U.S. sales are derived from imported goods, with less than half sourced from China, Mexico, and Canada.
“Given COST’s substantial scale and significant penetration of private label products, it’s well positioned to mitigate the adverse effects of tariffs,” Tarlowe stated as he reiterated a buy recommendation on the stock, raising the price target from $1,145 to $1,180.
Ranking No. 664 among over 9,400 analysts tracked by TipRanks, Tarlowe has had a successful rating record 55% of the time, achieving an average return of 11.4%. For insights on ownership structures, see Costco Ownership Structure.
Karman Holdings
Rounding out this edition is Karman Holdings (KRMN), a recently public entity specializing in defense and aerospace technologies. The company’s extensive portfolio includes payload systems, protection solutions, aerodynamic components, and propulsion systems.
Evercore analyst Amit Daryanani recently initiated coverage of KRMN with a buy rating and a price target of $38, citing optimism regarding its growth trajectory over the coming years, buoyed by numerous secular industry trends.
Daryanani highlighted significant factors for optimism, including robust growth in U.S. orbital launch activity, with Karman’s products being utilized across all U.S. launch providers. Moreover, he noted a heightened emphasis on missile defense and hypersonics within the U.S., alongside a multi-year initiative to replenish missile defense inventories for both the U.S. and its NATO partners.
The analyst estimates that Karman’s fiscal 2025 sales will increase by 18% year over year, reaching $409 million, alongside earnings per share projected at 36 cents and a 100-basis point enhancement in EBITDA margin to 31%.
Overall, Daryanani believes Karman is strategically positioned for consistent growth in the mid to high teens, thanks to its focused approach in addressing rapidly expanding sectors within defense and space.
Ranking No. 478 among the vast pool of analysts, Daryanani has seen profitable ratings 53% of the time, yielding an average return of 10.3%. For further analysis, see Karman Holdings Technical Analysis.
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