What happened

Several stocks that had taken an earnings-based tumble earlier this week were bouncing back on Friday. For example, remote health services expert Teladoc Health (TDOC 0.08%) saw share prices rise as much as 7% today. Content delivery network specialist Limelight Networks (EGIO -17.24%) reached a peak gain of 11.8%. Kiosk and ATM maker NCR (VYX 0.33%) surged even higher, briefly touching an 18% increase in the morning session.

These positive moves stand out on a day when the S&P 500 market index is down by 2.4%, and the more growth-oriented Nasdaq Composite index dipped 2.8% lower. In other words, the stocks are not riding a marketwide surge today. The motivation for these gains comes from other sources.

So what

To recap, all three of these stocks crashed hard after publishing earnings reports this week. Limelight's management didn't provide a guidance update based on a buyout that is still on the works. NCR's sales were limited by several factors outside the company's control. Teladoc's earnings were decimated by an accounting adjustment based on the stock's recent downtrend -- triggering another sharp drop. Even after today's significant rebound, these stocks are still underwater compared to last Friday's closing prices:

NCR Chart

NCR data by YCharts

So what's the big idea behind the three price increases today?

  • Limelight is up because two analyst firms see it as a massive buying opportunity after the crash. Analysts from Raymond James and Cowen agree that Limelight's fundamental business is robust if investors are willing to shrug off uncertainty around the Russian invasion of Ukraine. The stock is worth at least 60% more than Thursday's closing price, according to Cowen.
  • For Teladoc, growth investing expert Cathie Wood doubled down on her investment and called the company a "category killer" in the long run. Wood is expecting much more than a full recovery, mapping out a tenfold price gain as the digital healthcare thesis unfolds.
  • Finally, NCR has reportedly inspired buyout interest from at least six different potential buyers. The suitors include a mix of business peers, capital investment firms, and maybe even a bid from NCR's own CEO, Michael Hayford.
A bespectacled person chews on a pen while working with a desktop computer.

Image source: Getty Images.

Now what

These are three well-respected companies whose stocks probably deserve more respect from the Wall Street community. Here's the five-second elevator pitch for each one:

Limelight is a long-term turnaround story with close ties to the booming media-streaming sector.

NCR is a century-old company with buyout potential, trading at the rock-bottom valuation of five times free cash flows.

Teladoc is a future giant of modern medicine, an industry that never goes out of style. Sales have increased by a compound average of 75% in the last five years and you can pick up these shares at just 0.3 times book value.

So I'm not surprised to see these companies inspiring bullish reports after their recent crashes, and I'm happy to own two of them myself. If the market made a mistake this week, it was in the knee-jerk overreactions to three solid earnings reports with some short-term challenges. If you like to buy strong companies on dips in the stock price, this looks like a good time to take action on Limelight, Teladoc, and NCR.