Uber Technologies Inc.’s (UBER) stock has underperformed the S&P 500, rising by roughly 16.3% compared to the S&P 500’s gain of around 55.2% over the past two years. Despite the slowdown in performance, hedge funds have been actively adding Uber’s shares to their portfolios, and the stock rose on the WhaleWisdom Heatmap to a ranking of 10 from 43.

Uber’s ride-hailing and ride-sharing services are a well-known portion of its business that has been negatively impacted due to the coronavirus pandemic. However, Uber’s meal, grocery, and package delivery services have gained popularity during the pandemic. Despite recent market volatility, these convenience services continue to be successful sources of revenue for Uber.

Hedge Funds Are Buying

At the end of the second quarter, hedge funds were buying shares, and the aggregate 13F shared held increased to approximately 522.0 million from 514.5 million, an increase of about 1.5%. Overall, 51 hedge funds created new positions, 123 added to an existing one, 51 exited, and 80 reduced their stakes. In contrast, Institutions decreased their aggregate holdings by about 1.0% to 1.37 billion from 1.38 billion.

(WhaleWisdom)

Positive Multi-year Figures

Analysts expect the company to see a loss of $0.23 for 2021, with the loss widening to $0.62 per share by 2022. Revenue estimates offer encouragement, with analysts predicting approximately $16.0 billion for December 2021 and about $22.3 billion by December 2022. The 13F metrics between 2019 and 2021 reflect Uber’s fluctuating stock price, but the number of investors in the company has been steadily increasing, suggesting a long-term shareholder base is building.

Conservative Price Targets

Uber’s management shared optimistic predictions that bookings will continue to increase, but analysts appear to be taking conservative stances on the stock. Evercore ISI analyst Mark Mahaney kept an Outperform rating on the stock and a $70 price target. Mahaney is encouraged by Uber’s valuation setup and its growing online food delivery business. Doug Anmuth from JP Morgan Securities LLC noted that while driver supply challenges across the country have contributed to Uber’s underperformance, these supply trends are improving. Anmuth also shared ongoing concerns about Proposition 22, a debated ballot measure that preserves Uber’s ride-sharing business model. As a result, Anmuth kept an Overweight rating on Uber and a price target of $72. Wolfe Research LLC analyst Deepak Mathivanan was not as optimistic as other analysts and lowered his firm’s price target on Uber to $57 from $67, reiterating an Outperform rating on the shares.

Positive Outlook Beyond 2021

While Uber’s growth has recently slowed, hedge funds have bought the shares, and 2022 revenue estimates are encouraging. Demand for Uber’s range of services should continue to regain strength, and the company has taken measures to strengthen its workforce to address driver demand. The stock’s trends suggest an opportunity for patient investors.

The Walt Disney Co. (DIS) continues moving forward while slightly underperforming the S&P 500. The family entertainment and media company’s stock rose by approximately 22.9% as of September 30, 2021, compared to the S&P’s gain of about 36.2% since the start of 2020. However, while Disney’s growth may have temporarily fallen behind, it was recently added to the WhaleWisdom Whale Index 100 on August 17, 2021.

Disney represents an international family entertainment and media enterprise made up of multiple subsidiaries and affiliates. Often thought of for its fairytale movies, theme parks, and resorts, Disney’s entertainment options also include general entertainment and sports, cruises, and a successful Disney+ on-demand streaming service. The company’s business diversification has been helpful during the coronavirus pandemic. Disney’s theme parks were forced to close several times during the pandemic, cruise ships docked, studio production halted, and hotel reservations down. During this time, the company saw skyrocketing demand for its Disney+ service as families sought entertainment from the safety of their homes during stay-at-home government orders. However, all of Disney’s theme parks have since reopened gates, many of its cruises have resumed, movie theatres are slowly reopening, and even Disney’s ESPN Wide World of Sports experience relaunched in time for soccer season. As the travel industry’s rebound has a positive impact on Disney’s business, the appeal of Disney+ continues as well.

Hedge Funds Are Selling

Despite Disney’s overall year-to-date growth, hedge funds were actively selling the stock in the second quarter, and the aggregate 13F shares held by hedge funds decreased to approximately $243.9 million from $254.9 million, a decline of about 4.3%. Overall, 29 hedge funds created new positions, 220 added to an existing ones, 66 exited, and 176 reduced their stakes. Institutions slightly increased their aggregate holdings by about 0.1% to $1.2 billion. The 13F metrics between 2001 and 2021 reflect Disney’s rising stock price and demonstrate the potential for the stock to continue a forward trend.

(WhaleWisdom)

Positive Estimates

Analysts expect an increase in revenue in 2020 and 2021, bringing revenue to approximately $67.7 billion by September 2021 and about $84.8 billion by September 2022. Earnings are forecast to rise to $4.99 in 2022 from an estimated $2.50 in 2021.

(WhaleWisdom)

Analysts Note Slower Subscriber Growth

Top analysts may give Disney different ratings, but one thing most have in common is the acknowledgment that despite its popularity, Disney+ subscriber growth has slowed. BofA Securities analyst Jessica Reif Ehrlich lowered her expectations for fourth-quarter subscriber growth but maintained long-term estimates and reiterated a Buy rating for the stock and a $223 price target. Wells Fargo cut its price target on Disney to $203, down from $216, warning of slower subscriber growth. Analyst Brandon Nispel of KeyBanc Capital Markets Inc. had an Overweight rating on the stock and appeared to maintain confidence in long-term subscriber growth trends.

Optimism Beyond 2021

While 2020 and 2021 have included challenging months for Disney due to the pandemic, analysts remain optimistic for the future with encouraging earnings estimates through to 2022. Consumer interest in travel is returning, and it seems inevitable that demand for Disney’s travel destinations and entertainment sources will return to pre-pandemic levels. This entertainment and media giant holds promise beyond 2021 for patient investors.

Salesforce.com Inc. (CRM) continued its upward momentum, outperforming the S&P 500 and rising by approximately 69.2% compared to the S&P’s gain of about 33.3% since the start of 2020. The cloud services company saw positive second-quarter results, and long-term 13F metrics between 2004 and 2021 suggest that Salesforce’s investment potential remains strong.

Salesforce is a cloud-based software company and global specialist in customer relationship management (CRM). It provides CRM services and a suite of applications that focus on customer service, marketing automation, analytics, and application development. Salesforce’s business model has become more attractive during the coronavirus pandemic by allowing customers to use their cloud technology for improved communication and information-sharing during a time of increased telework and remote collaboration. In addition to Salesforce’s 2021 acquisition of Slack Technologies, Inc. that complemented its communication services, Salesforce also recently held its annual Dreamforce conference. The conference focused on helping companies find solutions to problems related to the pandemic and highlighted the importance of digital headquarters.

Hedge Funds Are Buying

Hedge funds and institutions were increasing shares in their portfolios. The aggregate 13F shares held by hedge funds increased to about 185.5 million from 174.1 million. Of the hedge funds, 69 created new positions, 176 added to an existing one, 28 exited, and 110 reduced their stakes. Overall, institutions increased their aggregate holdings by about 1.9% to approximately 713.3 million from 700.2 million.

(WhaleWisdom)

Positive Long-term Projections

Analysts estimate that earnings will fall slightly by January of 2022 and anticipate a subsequent rise by 2023 and 2024 of approximately 4.7% and 20.7%, respectively. These year-over-year changes would bring earnings to $4.62 per share by 2023 and $5.57 by 2024. Revenue estimates are very encouraging, with initial revenue figures for January 2022 of $26.3 billion, followed by more year-over-year estimated increases that would bring revenue to $37.0 billion by 2024, up from $31.8 in 2023.

(WhaleWisdom)

Analysts See Potential

Analysts are optimistic about the stock and raising price targets. Mizuho Financial Group analyst Gregg Moskowitz raised the firm’s price target to $320 from $300 and kept a Buy rating, citing the confidence level of Salesforce’s management team and the quality of sales opportunities. Patrick Walravens of JMP Securities took a positive view of the integration of Slack into Salesforce and raised the price target to $325 from $320, maintaining an Outperform rating. Wells Fargo analyst Michael Turrin kept an Overweight rating on the stock, raising its price target to $340 from $325. Piper Sandler Companies’ Brent Bracelin raised the company’s price target generously to $365 from $280 and shared confidence in a multi-year period of profit expansion and sustained growth.

Favorable Outlook

Salesforce’s history of growth and future multi-year estimates are encouraging for investors. The cloud services company continues to thrive through the pandemic and gain momentum. Analysts’ ratings and price targets speak to the company’s increased value and growth potential.

Zillow Group, Inc. (Z) stock plateaued after experiencing ups and downs transitioning into 2021. The real estate-focused media company could not maintain the record highs of early February 2021 yet still outpaces the S&P 500. Hedge funds were buying as Zillow outperformed the S&P 500, rising by approximately 105.1% compared to the S&P’s gain of about 37.7% since the start of 2020.

Zillow operates an online real estate marketplace with mobile and website applications. It generates revenue by selling advertisements to property management companies and real estate agents who place listings on their network. Zillow has a portfolio of brands, products, and services to provide real estate information and connect prospective buyers with real estate professionals and lenders. Zillow also sells advertising space to other businesses such as home organizers, insurance agents, and general contractors. Many homeowners are drawn to the Zillow.com website for its simple property valuation tool that provides a “Zestimate” of a house’s value; these Zestimates bring views in to see the advertisements and may also result in Zillow making an offer on a home. One of Zillow’s other related services is an iBuying program called Zillow Offers that allows the company to make real estate investments such as buying, fixing up, and reselling houses for a profit.

Hedge Funds and Institutions Are Buying

In the second quarter, aggregate 13F shares held by hedge funds increased to about 101.7 million from 99.3 million, an increase of approximately 2.4%. Hedge funds created 22 new positions, 60 added to an existing one, 36 exited, and 53 reduced their stakes. Institutions are also buying the stock, and aggregate holdings increased by about 1.6% to approximately 196.7 million from 193.7 million.

(WhaleWisdom)

Favorable Estimates

Analysts estimate that year-over-year increases will bring earnings to $1.29 per share by December 2022, up from December 2021’s predicted $1.05 in earnings. Revenue estimates are also encouraging, forecasting approximately $6.6 billion by December 2021 and rising to about $9.9 billion by December 2022. The 13F metrics between 2015 and 2021 reflect Zillow’s rising stock value with a peak in early 2021.

(WhaleWisdom)

Mixed Actions by Analysts

While Zillow saw growth through 2020 into the start of 2021, drops in the stock’s price factored into mixed analysts’ feedback. For some analysts, earnings were not strong enough to justify higher ratings and price targets. Brian Nowak from Morgan Stanley lowered the firm’s price target on Zillow to $153 from $155, maintaining an Equal Weight rating on the shares. Nowak shared optimistic revenue estimates but still sees Zillow’s iBuying business segment as continuing to “re-rate lower.” Piper Sandler analyst Thomas Champion noted the strong home sales market and kept an Overweight rating on Zillow’s stock. Meanwhile, Zelman & Associates upgraded Zillow to a Buy following a recent decline in value and after previously downgraded its stock rating to Neutral.

Better Days on the Horizon

Though Zillow’s stock value has fallen since February 2021, it continues to outperform the S&P 500. The U.S. housing market has seen soaring prices and high demand for inventory over the past year, offering continuing opportunities for Zillow’s business model. Zillow’s real estate marketplace has the potential to continue to see growth in parallel to the housing market. Analysts’ earnings predictions and the stock’s currently lower value may be attractive for long-term investors.

Carvana Co. (CVNA) saw continued growth over the past year, significantly outperforming the S&P 500 and rising by approximately 271.8% compared to the S&P’s gain of about 38.5%. Despite the stock’s continued growth and positive second-quarter results, hedge funds were selling as institutions added.

Carvana is an e-commerce platform for buying and selling used cars. As most of its business involves contactless online sales, the company has benefited from the coronavirus pandemic in many ways. Consumers’ preferences toward remote interaction and shopping have changed during the pandemic. Carvana allows them to browse, purchase and finance through a convenient online platform. Consumers may then choose between getting their vehicle delivered directly to them or picking it up at one of Carvana’s automated car vending machines. Also, the pandemic has created significant supply chain disruptions, leaving new car dealerships with minimal inventory and creating more demand for used cars from both dealerships and companies like Carvana.

Mixed Results from Hedge Funds and Institutions

Carvana saw mixed results during the second quarter activity. The aggregate 13F shares held by hedge funds decreased to about 42.8 million from 42.9 million, a mild decrease of approximately 0.1%. Of the hedge funds, 22 created new positions, 59 added to an existing holding, 31 exited, and 33 reduced their stakes. In contrast to hedge funds, institutions were buying. Overall, institutions increased their aggregate holdings by about 0.1%, to approximately 93.2 million from 93.1 million. The 13F metrics between 2017 and 2021 are a good reflection of Carvana’s rising stock price and demonstrate the potential for the stock to continue an upward trend.

(WhaleWisdom)

Two-Year Forecast has Neutral Feel

Analysts expect to see an initial decline in earnings per share, though eventually earnings and revenue are predicted to continue forward on a positive trend through to 2022. The company is forecast to have a loss of -$1.05 in December 2021, which is expected to then improve to -$0.33 by December 2022. Year-over-year estimated increases could bring over $12 billion in revenue by 2021 and $15.6 billion in revenue by 2022.

(WhaleWisdom)

Optimistic Analysts

Citigroup analyst Nicholas Jones was bullish on the stock, citing better than expected results in the second quarter. Jones raised the firm’s price target on Carvana to $405 from $375 and kept a Buy rating on shares. Chris Pierce of Needham & Co. was also enthusiastic about the stock and raised the firm’s price target to $421 from $400. Pierce noted that the pace at which Carvana’s shares have been gaining ground has accelerated, and he maintained a Buy rating on the stock.

Favorable Outlook

Carvana continues to build its customer base and show growth, benefitting from the unique environment created from the pandemic. Analysts appear bullish about this e-commerce company, raising price targets as demand for used vehicles increases. Future revenue estimates are also encouraging for investors.