The last few weeks of cascading share prices may be troublesome to most investors, but Cathie Wood doesn't mind buying during the deluge. The co-founder, CEO, and investment manager at Ark Invest has been more active lately in buying shares for her high-octane growth exchange-traded funds.
Thursday was another busy shopping day. Ark added to existing positions in Tesla (NASDAQ:TSLA), Iridium Communications (NASDAQ:IRDM), and Intellia Therapeutics (NASDAQ:NTLA). Let's take a closer look at the these three stocks that have had steep pullbacks in recent weeks.
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1. Tesla
It's been three months since Tesla hit an all-time high heading into the holidays, with CEO Elon Musk becoming a prominent political figure after the November presidential election. The stock has shed more than half of its peak value. It's been a rough run for the country's leading maker of electric cars. Sales were flat last year after a decade of consistent double-digit growth. It has also missed Wall Street's profit estimates in three of the last four quarters.
There is some good news despite the sell-off. Despite the notion that Musk's political turn may be hurting the brand internationally and alienating many stateside drivers, the market sees Tesla returning to double-digit growth this year. It also has more in the hopper than its current slate of vehicles. The stock has moved higher in the last two trading days, fueled in part by a timely analyst upgrade.
Image source: Getty Images.
Andres Sheppard at Cantor Fitzgerald shifted his sentiment from neutral to bullish. He is sticking to his earlier $425 target, but that represents 80% of upside from current levels.
Sheppard sees several catalysts coming into play in the near future. More affordable Tesla vehicles will start to be produced in the second quarter. The debut of Tesla's Cybercab robotaxi business is on track for volume production come next year. Advances in Tesla's self-driving platform continue to roll out with each over-the-air upgrade. It will take longer for its Optimus robots to hit the market, but the promise of home bots that can complete household chores is a huge market that can help smooth out the cyclical swings of the auto market.
2. Iridium
Like many stocks that got off to a hot start this year -- and Iridium was trading 20% higher year to date when it peaked a month ago -- this data and voice satellite communications specialist has given back all of its gains. Go back to the start of last year, and Iridium has surrendered a third of its value.
Iridium has grown to the point where it's serving 2.5 million billable subscribers, an 8% increase over the past year. It just hasn't been much of a top-line grower. It's had just one year of double-digit growth over the past six years, and it should be more of the same in 2025. Its guidance last month calls for just 5% to 7% in its bread-and-butter service revenue.
Things may not get better in near term. Barclays analyst Mathieu Robilliard lowered his firm's price target on the stock last week. He's concerned that growth will slow even more at this point given the competitive landscape that is starting to intensify. He remains bullish, and so does Wood, obviously. She has added to her Iridium stake in each of the first four trading days of this week.
3. Intellia Therapeutics
Wood has been a steady buyer of gene-editing stocks, a thin slice of the biotech market but also a segment with the most promise and upside. Intellia Therapeutics is a developer of CRISPR-based therapies tackling rare but devastating genetic disorders. If you think Tesla and Iridium have been hard on investors lately, Intellia is far worse. The stock has plummeted 96% -- yes, 96% -- since peaking north of $200 almost five years ago.
Mitchell Kapoor at Wainwright initiated coverage of Intellia earlier this month with a bullish rating and a $30 price target. He's encouraged by its NTLA-2002 candidate that offers a one-time treatment as opposed to comparable solutions that are drawn out prophylactic therapies with the same efficacy. Another bull -- Joon Lee at Truist -- lowered his firm's price target from $90 to $50. It's not usually a good sign when a target price is lowered sharply, but with Intellia now trading in the high single digits it would have to more than triple to hit the first $30 goal and soar almost sixfold to hit the other analyst's revised goalpost.
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Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intellia Therapeutics, Tesla, and Truist Financial. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.
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