While the intense fervor of meme stocks to buy now may have peaked a while ago, that doesn’t mean the activity of coordinating investments via social media platforms has gone away for good. Earlier this year, Barron’s noted that the meme frenzy is back.
To be sure, assuming that the original meme stock winners – a gaming retailer and cineplex operator (I own shares in both so I don’t want to name them) – will repeat their heroics is a risky call. However, I’m sure you’ve heard that cringe phrase, not all heroes wear capes. Well, not all meme stocks are complete [insert four-letter word here]. Some highly celebrated, social-media-driven ideas actually make sense. With that, below are sensible meme stock picks to consider.
The Microsoft logo outside a building representing MSFT stock.
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One of the biggest and most celebrated consumer electronics companies in the world, mentioning Microsoft (NASDAQ:MSFT) among the meme stocks to buy now almost seems like a slight. However, according to Memestocks.org, traders memed (or mentioned on the Subreddit /r/wallstreetbets) MSFT five times in the last 24 hours of this writing.
A well-balanced enterprise, Microsoft easily represents one of the best meme stocks for long-term investors. On the balance sheet, the consumer tech stalwart benefits from high fiscal stability, evidenced by its Altman Z-Score of 9.33. As well, it carries a very low risk of imminent bankruptcy. Operationally, Microsoft’s three-year revenue growth rate pings at 17.4%, above 72% of its peers. Also, its trailing-year net margin comes in at 33.25%, above nearly 97% of the competition.
Finally, analysts peg MSFT as a consensus strong buy. Overall, their price target is $325.73, implying a modest growth potential of over 4%.
Wendy’s (WEN)
A photo of a Wendy's chicken sandwich and chicken nuggets.
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Headquartered in Dublin, Ohio, Wendy’s (NASDAQ:WEN) represents the holding company for its namesake fast-food chain. According to the meme tracker, traders memed WEN three times in the past 24 hours. Fundamentally, Wendy’s might benefit from the trade-down effect as hard-hit consumers replace their eating-out budget with the fast-food brand. Therefore, it could be one of the meme stocks to buy now.
Stability-wise, Wendy’s admittedly incurred some trouble. In particular, its equity-to-asset ratio sits at 0.09, worse than 83.14% of its peers. Also, its Altman Z-Score of 1.43 indicates distress and a higher-than-normal risk of bankruptcy. However, it posts an impressive three-year revenue growth rate of 10.1%, above 82.28% of sector players. Also, the company enjoys a consistently profitable and predictable business.
Lastly, analysts apparently believe WEN will be one of the meme stock winners, pegging it a buy. Their average price target is $25.11, implying over 8% upside potential.
Disney (DIS)
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Although a major blue-chip enterprise, Disney (NYSE:DIS) ranks among the meme stocks to buy now. As of this moment, DIS represents the top idea, having been memed 31 times in the past 24 hours. The next security – which I’ll discuss later – was memed 22 times. Given Disney’s mass appeal thanks to its ownership of lucrative entertainment franchises, DIS may continue to be popular.
That’s going to be good news for stakeholders because Disney hasn’t performed well since releasing results for its second fiscal quarter. While the company matched the earnings-per-share target and slightly beat against revenue, Disney incurred a loss of 4 million subscribers for its streaming service Disney+.
To be sure, it narrowed losses against expectations. However, DIS dipped by 1% on May 10. As well, it fell nearly 5% in the after-hours session. Still, DIS could be one of the meme stock picks if you’re seeking a long-term discount. Encouragingly, analysts still peg DIS as a strong buy. Their average price target lands at $128.64, implying over 27% upside potential.
CyberArk Software (CYBR)
A close-up shot of fingers over a keyboard with blue and white text overlaid.
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An information security specialist, CyberArk Software (NASDAQ:CYBR) ranks as one of the most-watched meme stocks to buy now. According to the meme tracker, traders memed CYBR 8 times during the past 24 hours. Fundamentally, this framework makes sense. Cybercrimes continue to rise, with experts warning that digital nefarious activities may cost the world $10.5 trillion annually by 2025.
Cynically, digital threats should keep the lights on at CyberArk and that’s great news because its financials lack pizzazz. While the company enjoys decent stability as evidenced by its Altman Z-Score of 3.49, some other metrics could use improvement.
Operationally, CyberArk’s three-year revenue growth rate pings at 9.3%, a bit better than the sector median stat of 7.3%. However, on the bottom line, both its trailing-year operating and net margins sit well in negative territory. Still, those seeking meme stock opportunities may look to CYBR as analysts peg it as a consensus strong buy. On average, their price target comes out to $177.56, implying over 29% upside potential.
Robinhood (HOOD)
Robinhood app logo seen on smartphone on US dollar banknotes
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One of the platforms that started it all, Robinhood (NASDAQ:HOOD) through its gamified trading app helped spark the meme revolution. Therefore, it’s no surprise that it ranks among the most-watched meme stocks to buy now. At the moment, the meme tracker states that traders memed HOOD 20 times over the past 24 hours.
Notably, HOOD performs well so far this year, gaining over 12% of equity value since the January opener. Again, it’s great that retail investors love HOOD so much because its financials present a mixed bag. For example, Robinhood enjoys a cash-to-debt ratio of 8.34, above 63.41% of sector players. Unfortunately, its Altman Z-Score sits at 0.25, indicating great distress.
Still, HOOD ranks among the possible best meme stocks for speculation. While it might not reach the blistering heights of 2021, in Q1 2023, Robinhood posted a revenue surge of $441 million, beating the consensus target of $424.8 million. Thus, it’s on the right track. To be fair, analysts peg HOOD as a hold. However, their average price target of $12.59 implies nearly 39% upside potential.
PayPal (PYPL)
PayPal logo and front of headquarters. PYPL stock
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One of my personal favorites to discuss, it’s important to note that digital payment processing specialist PayPal (NASDAQ:PYPL) hasn’t delivered the goods recently. Since the start of this year, PYPL dropped 15% in equity value. Nevertheless, the meme tracker notes that traders memed PYPL 15 times over the past 24 hours. For those that want to gamble, PYPL could be one of the meme stocks to buy now.
On May 9, Barron’s reported that PayPal posted Q1 revenue of $7.04 billion, beating the target of $6.98 billion. As well, the company’s adjusted earnings per share of $1.17 came in higher than the estimate of $1.10. However, shares slipped because executives anticipate at least 100 basis points of operating-margin expansion this year, down from approximately 125 basis points previously. Still, the Street remains optimistic about PayPal’s several new initiatives. Therefore, they’re in a wait-and-see mode.
What this dynamic translates to is a consensus moderate buy view. Overall, the experts’ average price target stands at $110.11, implying nearly 74% upside potential.
U.S. Steel (X)
Steel stocks: rods, bars and other forms of steel
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An oddity among the meme stocks to buy now, U.S. Steel (NYSE:X) seems more like a baby boomer’s investment. After all, the company was founded in 1901. Nevertheless, it’s the second-most memed enterprise as of this writing. Over the past 24 hours, traders memed X stock 22 times. Although it apparently has the support of retail investors, X fell nearly 15% since the January opener.
In late April, U.S. Steel released less-than-encouraging data. In Q1, the company’s profit plunged by 77% YOY to $199 million. However, executives framed the result as “another strong quarter,” stating that its operating segments exceeded expectations. Net sales came in at $4.47 billion, down from $5.23 billion in the year-ago quarter. Unfortunately, the market hasn’t responded that well to X stock. Still, several retail investors are hoping that it can flip things around, becoming one of the meme stock winners.
For the record, analysts peg U.S. Steel shares as a hold. However, the average price target is $43.83, implying over 105% upside potential.
On the date of publication, Josh Enomoto 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.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
