With the S&P 500 back up near record highs, it can be a challenge to find stocks that still have further room to rally. The danger is that valuations can become inflated, leading stocks to pullback if the mood turns sour or data disappoints. The key is to find stocks that still look undervalued and are delivering strong growth with significant new opportunities ahead. The stock picks below deliver just that- and what’s more these are the names highlighted by analysts with a proven track record of success. 

TipRanks analyst forecasting service attempts to pinpoint Wall Street’s best-performing analysts- so investors can follow the recommendations of analysts that tend to get it right. These are the analysts with the highest success rate and average return measured on a one-year basis — factoring in the number of ratings made by each analyst.

Here are the best-performing analysts’ six favorite stocks right now:

File-sharing service Dropbox has plenty of upside potential coming up ahead, according to top RBC Capital analyst Alex Zukin. He reiterated his buy rating on DBX post-earnings with a price target of $ 30- suggesting shares can surge over 50% from current levels.

For the quarter, Dropbox posted solid 2Q beats on revenue and paid users, highlighted by accelerating ARR (annual recurring revenue) growth. And while average revenue per user trailed consensus, this was driven by large deal activity (a positive, in Zukin’s view). Looking ahead, 3Q and CY20 outlook came in ahead of consensus and ‘appears conservative’.

“We view underlying business as healthy, and the company remains on track to deliver material margin expansion through CY24” the analyst told investors on August 7. He believes DBX is undervalued on both a growth-adjusted and absolute basis and sees the potential for additional strong quarters to change the narrative.

What’s more, Dropbox is addressing a very large market opportunity that combines the Cloud Storage, Team Collaboration, and Work Productivity vectors. It does this with a high-growth, high- margin business model and is developing new growth options, says Zukin.

One of the Top 50 analysts ranked by TipRanks. Zukin is currently tracking a stellar 71% success rate and 26% average return per rating.

Shares in biotech Moderna have exploded by over 240% year-to-date, boosted by optimism over its coronavirus vaccine mRNA-1273. On August 11, Moderna announced that the US government has secured 100 million doses of mRNA-1273 for $ 1.53B, in addition to a previous $ 955M investment to speed up the vaccine’s approval process.

On the news top Oppenheimer analyst Hartaj Singh reiterated his MRNA buy rating, with a bullish $ 108 stock price forecast (60% upside potential). Although the potential initial price of mRNA-1273 is far below the economic price quoted by MRNA on its 2Q20 call, Singh is far from concerned, noting that the drug’s price is likely to fluctuate over the next 6–12 months.

“While investors chose to focus on the average price paid per course of therapy ($ 12 to $ 13 per course) for this initial 100M doses (two doses per course), we would point out that MRNA is still the only company with a manufacturing set-up and scale-up that can deliver 10’s to 100’s of millions of doses per month of mRNA-1273” he wrote on August 12.

At extremely competitive pricing, this would still equate to a substantial business, says Singh, one that likely exceeds his expectations (~$ 1B in 2021 sales). And while competitors are setting up manufacturing campaigns, scale-up is still a work in progress, whereas Singh’s diligence suggests MRNA is already moving beyond set-up and scale-up.

“As such, we continue to believe MRNA is the lead to provide major amounts of safe and effective COVID-19 vaccines” the analyst concludes.

Five-star Oppenheimer analyst Rupesh Parikh has just upgraded his rating on Estee Lauder from hold to buy, writing “EL shares again positioned for outperformance; upgrading to outperform.” That’s as well as a Street-high $ 240 stock price forecast, and a re-established ‘top pick’ status.

Parikh explains that he previously downgraded the stock due to concerns of severe near-term headwinds related to coronavirus in China. “In hindsight, we underestimated both the severity of the pandemic and the pace of a potential recovery from the bottom” the analyst wrote on August 13.

Based on his recent work, the analyst now “see[s] a more rapid profit recovery than previously envisioned driven by the Chinese consumer, a resilient skincare category, and accelerated online growth.”

Indeed, Parikh believes that the combination of a potential mix shift toward the higher margin skincare category, a favorable channel shift (more online penetration), and benefits of expense initiatives could facilitate steady margin expansion to at least peak levels in coming quarters.

“We believe the low interest rate backdrop and the company’s superior growth prospects support a premium valuation” he adds. With EL likely to deliver an in-line fiscal fourth quarter on August 20, Parikh recommends investors take advantage of any volatility on the print.

Thanks to his strong stock picking skills, the analyst is ranked at #201 out of 6,877 analysts tracked by TipRanks.

Optical networking and laser company Lumentum is on a roll right now. Despite coronavirus challenges, LITE has just reported another strong quarter that meaningfully beat consensus revenue and earnings estimates. F1Q21 guidance also topped Street estimates.

“The CY2Q/FY4Q print exceeded forecast and guidance on every metric. Moreover, demand for their highest margin products are running ahead of capacity” cheered Needham’s Alex Henderson post-earnings. The five-star analyst reiterated his LITE buy rating on August 11 while taking his price target to $ 115 from $ 105.

He expects solid growth in 3D Sensing, Data Comm, ROADMs and Coherent products to ‘easily offset’ cyclical pressures in Industrial Lasers, with capacity additions suggesting revenue acceleration well into FY22.

With shares up 15% year-to-date, Henderson’s new price target indicates 26% upside potential. But that could be on the low side: “We see further upside and consider our estimates and Target Price to be conservative” Henderson told investors.

Net-net “Lumentum has long been a favorite name in the Optical sector”. As well as an attractive valuation, Henderson believes Lumentum should benefit from a strong upgrade cycle to 5G phones, the emergence of World Facing 3D modules over the next couple of years, and growth in 3D in the Android markets.

He is ranked at #117 out of over 6,800 analysts tracked by TipRanks.

BridgeBio Pharma is a clinical-stage company focused on genetic diseases, including cancers with genetic drivers. And it has just announced a savvy partnership with Shanghai-based LianBio, a new company founded by the well-regarded hedge fund Perceptive Advisors.

Following the news, HC Wainwright analyst Ram Selvaraju reiterated his BBIO buy rating with a $ 50 stock price forecast, indicating significant upside potential of over 70%. He notes that the LianBio partnership should expand BridgeBio’s global reach into China, the second-largest pharma market in the world.

Under the terms of the agreement, BridgeBio will receive an upfront payment of $ 26.5M and up to $ 505M in milestone and sales-based royalty payments. “Conservatively, we do not currently include contributions from the LianBio partnership in our valuation model; any future revenues from this relationship would thus constitute upside to our forecasts” the analyst told investors on August 12.

Aside from the deal, Selvaraju sees “multiple catalysts across an extensive portfolio.” He expects rapid regulatory progress with two New Drug Applications (NDA)- most notably for BBP-870 for the treatment of patients with MoCD Type A, a rare condition characterized by brain dysfunction.

“We anticipate that this NDA could be the subject of approval on an accelerated schedule (six-month review), potentially facilitating the U.S. launch of BBP-870 in 1H21” says Selvaraju. With a 34% average return per rating, the HC Wainwright analyst is ranked an impressive #58 out of all the analysts tracked by TipRanks.

This digital media company has just received the thumbs up from RBC Capital analyst Shweta Khajuria. Following a Q2 earnings beat, with revenue and EBITDA above estimates and management guidance, Khajuria decided to re-evaluate her cautious outlook on the stock.

“We are upgrading to Outperform on attractive valuation, stable-to- improving trends, and the company’s decision related to Board refresh & buybacks” she wrote on August 11. At the same time, Khajuria boosted her JCOM price forecast from $ 78 to $ 90 (28% upside potential).

According to the analyst, “JCOM has recently remained at depressed levels largely due to coronavirus-related uncertainties and downside pressure from intra- Q short report. That said, we believe these two overhangs have largely been cleared up and we are now constructive.”

Not only is JCOM currently trading far below its historical median, but the company is also seeing stable-to-improving trends and fundamentals, as well as a more resilient media business with limited exposure to travel/local/auto categories, and strength in the healthcare vertical.

That’s on top of a strong M&A track record and large TAM (total addressable market) with secular tailwinds. “J2’s Digital Media segments address the $ 1T+ Global advertising market and benefit from an ongoing shift to digital, with Everyday Health addressing $ 15B in Healthcare Ad spend” points out Khajuria.

This best-performing analyst boasts an 81% success rate and 65.8% average return per rating.