## Top 2 Analyst Picks: Stocks Poised for Double-Digit Growth
When it comes to investing in stocks, analysts’ opinions carry significant weight. While a ‘Moderate Buy’ or ‘Buy’ rating might seem like a green light, it’s not the whole story. The trend in sentiment and coverage is far more important than a simple consensus rating.
Think of it this way: a ‘Buy’ rating doesn’t mean much if recent revisions include downgrades, price target reductions, or even lapsed coverage. These are headwinds for stock prices, potentially signaling a peak and a high chance of a bearish reversal. On the other hand, a stock with a ‘Sell’ consensus rating but recent upgrades and price target increases could be a better choice. These are tailwinds that could propel a market bottom and usher in a bullish reversal.
Another key indicator is increasing analyst coverage. Growing coverage translates to growing investor interest and potentially larger inflows of money, which can be a powerful force driving stock prices higher.
The two stocks discussed in this article, Chewy (CHWY) and Gitlab (GTLB), are attracting new coverage and experiencing positive revisions, which suggests a bright outlook for their future.
### TD Cowen Takes a Bite of Chewy, Inc. Citing Long-Term Growth Potential
Chewy, a leading online pet retailer, has been steadily attracting analyst attention, particularly after exceeding expectations in recent quarters. Over the summer, analysts started increasing their price targets for the stock.
MarketBeat.com currently tracks 22 analysts who have a high conviction in the Moderate Buy rating. The latest price targets have even surpassed the consensus estimate, setting the bar high for the stock’s potential.
The latest report comes from TD Cowen, which initiated coverage on Chewy with a Buy rating and a price target of $38. This target is a whopping 28% higher than the recent trading price and the consensus target, which assumes fair value around $28.50.
The consensus rating has been steadily rising over the past three months, jumping by 12%, and is expected to continue climbing given the strong revenue growth and earnings outlook. While Chewy’s growth slowed to low single digits in F2025, it remains sustained and is projected to accelerate in F2026. Analysts predict revenue growth to surpass 5% in F2026, and TD Cowen forecasts even faster growth in the coming years, driving a 9% CAGR over the next five years.
This 9% CAGR target is almost double the forecasted industry average, further boosted by a widening margin. Chewy’s EBITDA margin is anticipated to nearly double, reaching 8%, leading to increased free cash conversion and a stronger balance sheet. Key growth drivers include a rising customer count, increased revenue per customer in the retail business, and deeper penetration of services tied to pet health.
Chewy’s financial standing is healthy, with its positive cash flow business contributing to ultra-low debt levels. Long-term liabilities, including lease obligations, are less than 1x cash and just over 1x equity.
Furthermore, institutional activity is bullish for Chewy. Institutions own nearly 95% of the stock and have been net buyers in 2024, demonstrating their confidence in the company’s future.
### Morgan Stanley Says Gitlab Is a Key Consolidator of a Fragmented Market
Gitlab, a leading DevSecOps platform, has also caught the attention of Morgan Stanley, which initiated coverage with an Overweight rating and a price target of $70, representing a 30% upside from the recent trading price.
Morgan Stanley views Gitlab as an emerging enterprise-grade platform that is poised to consolidate a highly fragmented market. The firm forecasts a 25% revenue CAGR for the next four years, fueled by a doubling of the margin as software developers prioritize efficiency and security.
MarketBeat.com tracks 25 analysts with high conviction in the Moderate Buy rating for Gitlab. The consensus target is steadily rising, and the number of analysts covering the stock has increased by 100% in the last 18 months.
This growing coverage reflects the increasing recognition of Gitlab’s potential. The consensus rating currently suggests a 23% upside from the recent trading price, while Morgan Stanley’s target adds another 600 basis points, aligning with the overall trend. A move to consensus would push the stock to an 8-month high.
Both Chewy and Gitlab are attracting significant attention from analysts, with their respective fields and growth potential driving positive sentiment. As these companies continue to execute on their strategies and capitalize on the opportunities in their markets, it’s worth keeping an eye on their stock performance.