Selecting the best stocks is akin to visiting an apple orchard in the fall. Arrive at the right time, and you’ll find the finest fruit still hanging on the trees, making it easy to fill your basket. Just as you use ladders and hooks to reach the highest branches in the orchard, in the stock market, you can rely on tools like the Smart Score to identify top opportunities.
The Smart Score is an AI-powered stock sorting tool devised by TipRanks. It uses natural language algorithms to sift through every publicly traded stock out there – and to rate them according to a set of factors that are known indicators of future outperformance. Each stock’s ratings are distilled down to a single score, based on an intuitive 1-to-10 scale, with the ‘Perfect 10’ indicating shares that deserve a closer look.
So, let’s open up the TipRanks database and look at two stocks that are scoring high as we get going in 2025. These are both ‘Perfect 10s,’ meaning they each hold the highest possible Smart Score; let’s find out what else makes them attractive portfolio additions for the new year.
Nutanix(NTNX)
We’ll start in the world of cloud computing, where our first ‘Perfect 10’ stock, Nutanix, has put together an array of products designed to meet the unique challenges presented by cloud software and database management. Nutanix, which was founded in 2009, offers its customers a cloud platform and a set of tools that bring together the advantages of both public and private cloud architectures. The company’s products bring solutions to such needs as storage and network demands, disaster recovery, cloud security, and virtual networking. Users can automate their operations and speed up their service deliveries while reducing overhead costs, and also unify storage for structured and unstructured data.
That’s a serious list of features, and it’s hardly the full list. Nutanix delivers on its promise of quality service, and that delivery, plus the range of products, has attracted a base of first-rank enterprise customers, including such names as Home Depot, AAA, and Seven Eleven. In all, the company boasts a customer base more than 25,000 strong.
Just this past November, Nutanix announced an important improvement to its platform, with the addition of an AI infrastructure. The upgrade brings generative AI tech onto the public cloud, giving users access to a unified genAI experience capable of accelerating workloads in a hybrid multicloud environment.
On the financial side, Nutanix recently released results from its fiscal 1Q25 (October quarter), and beat the forecasts at the top and bottom lines. The company’s revenue, of $591 million, was up 15.6% year-over-year and came in $18.79 million better than expected; the non-GAAP earnings, at $0.42 per share, came in 10 cents per share better than anticipated. In two other important metrics, the company reported annual recurring revenue, ARR, of $1.97 billion for fiscal Q1, for an 18% y/y gain, along with a quarterly free cash flow of $151.9 million, up 14.6% from fiscal 1Q24.
UBS analyst Jeff Hickey stands squarely in the bull camp on this stock, and cites several reasons to support his optimistic stance: “1.) the opportunity to capture $400 million from a ~$5 billion opportunity from VMware acquisition disruption, supporting our $3.1 billion ARR estimate – above the Street’s $3.0 billion in FY27. 2.) Nutanix’s leading position in hyperconverged infrastructure software – a segment expected to maintain double digit growth over the next several years, and 3.) a view that while public cloud infrastructure names continue to gain overall share of IT budgets, demand for on-premise data center investments is not going to zero – benefiting Nutanix as the company increasingly supports hybrid/multi-cloud postures.”
Hickey puts a Buy rating on this stock, and complements that with an $81 price target that suggests a 30% upside potential for the year ahead. (To view Hickey’s track record, click here)
NTNX has earned a Strong Buy consensus rating, based on 10 Wall Street reviews that include 8 to Buy and 2 to Hold. The shares are priced at $62.41 and their average price target, $81.90, indicates a potential to gain 31% in the next 12 months. (See NTNX stock forecast)
Progressive Corporation(PGR)
For the second stock on our list, we’ll look at an insurance company that has earned the Smart Score’s ‘Perfect 10.’ Progressive is a giant of the industry – in fact, its $142.7 billion market cap makes it the world’s second-largest insurer. The company dates back to 1937, and is today one of the largest automobile insurers in the US market. As part of its auto insurance services, the company also offers policies on motorcycles, RVs, trailers, boats, and passenger and commercial vehicles. Customers can also shop Progressive for home, renters, and life insurance, as well as policies to cover ID theft, jewelry, dental and vision care, and even special events. The company offers savings for customers who bundle their policies together, and boasts over 37 million customers.
Progressive reports monthly financial results, and its last report covered November 2024. In that month, the company saw $5.56 billion worth of net premiums written, up 18% from November 2023, and brought in $6.04 billion worth of net premiums earned, for a 19% year-over-year gain. The company saw a net income during the month of just over $1 billion, up 48% from the previous November.
When it comes to returns for investors, Progressive’s stock has outperformed the broader markets in the past 12 months. During that time, PGR shares have gained 48%, easily beating the 24% gain seen on the S&P 500 over the same period.
This stock has caught the attention of Raymond James analyst Charles Peters, who sees plenty of reasons to take a bullish stance here. The 5-star analyst writes, “The company’s long-term record of growth and value creation makes it a core holding for large cap growth investors. We believe the near-term outlook includes industry leading PIF growth and better-than-target combined ratios. We expect the company to produce the combination of double-digit NPW and NII growth, partially offset by some minor deterioration in the underlying combined ratios through 2026. We expect PGR to rank #1 among large caps in our annual ROBE table in 2025 and 2026, which includes all publicly traded insurance companies.”
Peters goes on to put an Outperform (i.e. Buy) rating on the stock, with a price target of $305 that implies a 25% gain on the one-year horizon. (To view Peters’ track record, click here)
Overall, the 16 recent analyst reviews on Progressive’s stock break down to 12 Buys and 5 Holds, all for a Moderate Buy consensus rating. The shares are priced at $243.59, and their $282.82 average target price suggests that a 16% gain is expected for this year. (See PGR stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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