ARK Innovation (NYSEARCA:ARKK) has been selling some of its Cathie Wood stocks. Robust earnings boosted valuations to record highs. The move may be part of Wood’s signature contrarian investment approach, as institutional investors reallocated capital into tech in February. This has left ARK with available capital. So now is an ideal time to explore some Cathie Wood stocks. She stays committed to her pledge to buy during periods of decline.
The broader market is expected to continue its momentum through March. So, look for opportunities to emerge in some Cathie Wood stocks that have recently underperformed. Now they show potential for recovery. The tech sector, in particular, remains strong, indicating some recent select Cathie Wood stocks could experience an upside.
Pinterest (PINS)
Pinterest (NYSE:PINS) is one of the Cathie Wood stocks recently chosen for her Ark Invest ETF. Its share price has been trading down for the year despite posting decent Q4 results.
The company saw its revenue jump 12% over the prior year. Also, its Adjusted EBITDA margin increased massively to 37% from 22%. While Pinterest has not posted a profit yet like many other high-growth tech companies, some investors remain optimistic about its long-term potential.
Pinterest’s management is optimistic after the company saw its monthly active users (MAU) reach an all-time high last quarter. This increased its average revenue per user (ARPU). Meanwhile, the company is looking to leverage its user base to become an e-commerce hub, which could attract more investors.
Roku (ROKU)
The streaming company Roku (NASDAQ:ROKU) experienced a 28% drop in February, becoming one of the latest Cathie Wood stocks. The price drop came in the wake of generally positive earnings, showing growth in gross margin and cutting expenses.
The stock has already been under pressure following an announcement that Walmart (NYSE:WMT) will buy Roku’s rival Vizio Holding (NYSE:VZIO). This relationship which could potentially eat into the home streaming market. However, analysts suggest that the deal shouldn’t hurt Roku in the long run. It is reminiscent of a similar deal in 2010 that didn’t seriously threaten the streaming space.
Analysts still see an upside for this Cathie Wood stock, with an average target price of $84.85 per share compared to the current price of $62.67.
Sofi Technologies (SOFI)
The stock price of SOFI (NASDAQ:SOFI) witnessed its worst daily performance on record. On Wednesday, the company announced it would issue $750M in convertible bonds.
As the company’s share price doubled last year, it’s not surprising that it would attempt to bolster its balance sheet. SOFI’s latest results were relatively positive, as it turned a profit for the first time thanks to a 35% jump in revenue.
The company expects revenue to grow by 50% this year, with EPS staying positive and growing to $0.08 per share. Analysts still see an upside to the company, with the average target price at $9.00 per share compared to $7.40. Some analysts note that ARK will likely increase holdings as one of Cathie Wood stocks should the company continue delivering on its growth targets.
On the date of publication, Stavros Tousios did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
