2 Low-Priced Stocks That Wall Street Analysts Think Have More Than 25% Upside Potential

The S&P 500 registered 65 all-time highs this year and has more than doubled since the onset of the COVID-19 pandemic. The benchmark saw eight straight all-time closing highs last week. Although the major benchmarks dipped in their last trading session due to concerns over the market’s vulnerability to rising inflation and a surge in…

COVID-19 cases, the indices are still hovering near their record highs. The Dow is just 1.7% shy of its all-time high, while S&P 500 and Nasdaq are down 0.6% and 0.8% from their record highs, respectively.

Also on the positive side macroeconomically, weekly jobless claims are expected to reach a new pandemic-era low. Analysts expect unemployment claims to come in at 260,000 versus 267,000 reported in the prior week, which would mark the sixth straight week with jobless claims below the 300,000 level. Also, President Biden recently signed the long-awaited trillion-dollar bipartisan infrastructure bill into law, which could potentially boost the U.S economy further.

The economic recovery, low-interest-rate environment, and solid corporate earnings should continue supporting the stock market. Given this backdrop, Wall Street analysts expect low-priced stocks Castlight Health, Inc. (CSLT – Get Rating) and Lincoln Educational Services Corporation (LINC – Get Rating) to rally by more than 25% in the near term. This, along with solid fundamentals, we think makes these stocks good bets right now.

Castlight Health, Inc. (CSLT – Get Rating)

CSLT provides health navigation solutions for employers and health plan customers in the education, manufacturing, retail, government, and technology industries in the United States. Its health navigation platforms provide a comprehensive health and wellbeing experience. CSLT is based in San Francisco. In August, CVLT announced the addition of four new partners to its industry-leading digital health ecosystem: Spring Health, WW, SWORD Health, and Progyny (PGNY). The company expects these new partnerships to strengthen its position as the most comprehensive digital hub that employers and health plans can offer their participants, while also enabling CSLT to address complex workplace health challenges.

CSLT also updated its annual medical spend analysis for 2020 to reflect that user that engaged with the CSLT platform had incurred lower total medical spending in 2020 versus 2019, compared to non-users within CSLT customers’ populations. This demonstrates its expertise in healthcare navigation.

CSLT’s professional services revenue increased 213.5% year-over-year to $3.16 million in its fiscal third quarter, ended September 30. Its net cash provided by operating activities stood at $5.84 million, up 113.2% from the same period last year, while its cash and cash equivalents balance came in at $66.91 million, indicating a 39.6% increase year-over-year.

A $36.10 million consensus revenue estimate for its fiscal first quarter, ending March 2022. indicates a 3% improvement year-over-year. Analysts expect the company’s EPS to increase 30% per annum over the next five years.

 

 

CSLT has gained 46.2% in price year-to-date. Over the past year, the stock has gained 61% to close yesterday’s trading session at $1.83. The $2.35 median price target indicates a 28.4% potential upside from its last closing price.

It is no surprise that CSLT has an overall B grade, which equates to a Buy rating in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 distinct factors, with each factor weighted to an optimal degree.

CSLT also has a B grade for Value and Quality. It is ranked #16 of 87 stocks in the Medical – Services industry. Click here to view additional CSLT ratings for Growth, Sentiment, Momentum, and Stability.

 

Note that CSLT is one of the few stocks handpicked by our Chief Growth Strategist, Jaimini Desai, currently in the POWR Stocks Under $10 portfolio. Learn more here.

 

Lincoln Educational Services Corporation (LINC – Get Rating)

LINC provides various career-oriented post-secondary education services to high school graduates and working adults in the United States. The company operates through three segments: Transportation and Skilled Trades; Healthcare and Other Professions; and Transitional. LINC is based in West Orange, N.J.

In November, LINC completed the sale and lease-back transactions of its Denver, Colo., and Grand Prairie, Tex., properties for an aggregate sales price of $46.5 million. The company intends to…

 

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