Invest in these stocks with ‘stronger fundamentals and less risk,’ Piper Sandler says

In today's volatile financial landscape, identifying investment opportunities that balance robust fundamentals with minimized risk is paramount. Piper Sandler, a leading financial services firm, has spotlighted several stocks that exemplify these attributes, offering investors potential avenues for stable growth.

SailPoint Technologies Holdings (SAIL)

Piper Sandler recently initiated coverage on SailPoint Technologies Holdings, assigning an Overweight rating with a price target of $30.00. SailPoint, a leader in enterprise identity security, has demonstrated impressive performance metrics, including over 30% growth in Annual Recurring Revenue (ARR) and operating margins exceeding 14% in the trailing twelve months. These figures underscore the company's strong market position and growth potential.

On Holding AG (ONON)

On Holding AG, known for its innovative footwear, has maintained an Overweight rating from Piper Sandler, with a reaffirmed price target of $62.00. Despite a year-to-date decline in share price, the company's fundamentals remain strong. Piper Sandler anticipates a slight beat in On Holding's fourth-quarter performance, citing expectations of higher gross margins due to the company's full-price stance during the holiday season. Looking ahead, a sales growth guide of 25% on a constant currency basis is projected, reflecting the company's resilience and strategic positioning in the market.

Investment Banks and Brokerages

The investment banks and brokers group, which includes firms like Interactive Brokers, Piper Sandler, and Stifel Financial, ranks 40th out of 197 industry groups, indicating a strong position within the market. Several companies in this sector are forming bullish chart patterns, suggesting potential growth opportunities:

• Interactive Brokers: Currently in a V-shaped cup base with a buy point of 129.19, indicating potential for upward movement.

• Piper Sandler: Forming a skewed cup-with-handle base with a 277.10 buy point, with earnings expected to rise 31% and 29% in the coming years, breaking two years of declining earnings.

• Stifel Financial: Developing a cup-with-handle base with an 88.19 buy point, with profit estimates showing 40% growth in 2024 and 18% in 2025, following two years of declining profits.

These patterns and forecasts highlight the potential within the investment banking and brokerage sector for investors seeking stocks with strong fundamentals and reduced risk.

Conclusion

Piper Sandler's analysis provides valuable insights for investors aiming to navigate the current market's uncertainties. By focusing on companies like SailPoint Technologies Holdings and On Holding AG, as well as promising investment banks and brokerages, investors can align their portfolios with stocks that exhibit robust fundamentals and a favorable risk profile.