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TipRanks
3 Monster growth stocks that still have room to run
Investors are in the market for profit, which means finding stocks with proven potential for growth. Yes, that’s a cliché to remind everyone that past performance is no guarantee of future results, but when a stock consistently shows strong stock appreciation, over an extended period of time, that’s a positive sign. for investors. With more than ten months behind us, stocks now showing a combination of strong earnings and high potential in the short to medium term will attract investor interest. With that in mind, we sought to find stocks that Wall Street qualifies as Exciting Growth. Using the TipRanks database, we picked out three names backed by analysts who have already posted impressive gains and who boast strong long-term growth rhetoric. Bandwidth, Inc. (BAND) We are starting in the communications software industry, where Bandwidth is a leading provider of VoIP systems, using its Application Programming Interfaces (APIs) to provide customers with text and of voice. The company’s products include applications for voice calls, text messaging, local telephone numbers over the Internet, and access to the 911 emergency telephone system. Bandwidth has developed and built its own voice over Internet network, contributing Connectivity Like many online tech companies, BAND has benefited from 2020’s shift to remote working. The move into the virtual office space has put a premium on internet communications, and BAND’s shares have reflected it – the stock is up 135% year-to-date. The company’s third-quarter profits were also strong – and at 14 cents per share, it was well above the expected 12-cent per share net loss. Third quarter revenue was $ 84.8 million, a 40% year-over-year increase. In addition to positive revenue and profit, Bandwidth also demonstrated strong liquidity. The company had more than $ 300 million in cash and cash equivalents at the end of September, while liabilities were only $ 57.8 million. Finally, earlier this month Here, Bandwidth has completed the acquisition of the European cloud communications company Voxbone. The transaction was valued at 446 million euros, or more than 520 million dollars in US currency. The transaction included 354.6 million euros in cash and the remainder in stock. Growing bandwidth and healthy future prospects have caught the attention of 5-star analyst Michael Walkley. Written by Canaccord, this leading analyst said: “Given that Covid-19 has an impact on the way we work, learn and interact for the foreseeable future, we believe that bandwidth is a long-term beneficiary of strong growth trends expected due to increased Platform usage. We believe revenue growth is expected to remain strong given our expectations for some permanent long-term changes with an increased remote working environment, resulting in both increasing use by existing customers and increasing potential for growth of new customers. To that end, Walkley is putting a buy note on BAND’s stock, and its price target of $ 225 portends a rise of nearly 50% over the next 12 months. (To see Walkley’s track record, click here) Overall, BAND has an analyst consensus moderate buy rating based on 5 reviews, including 4 buys and 1 sell. The shares are priced at $ 150.50, and the average price target of $ 192.20 implies a one-year hike of about 28%. (See BAND’s market analysis on TipRanks) Wayfair, Inc. (W) From cloud communications, we are moving to e-commerce, where Wayfair is a leader in the home and furniture industry. E-commerce saw heavy gains during the COVID pandemic, with customers shifting more of their shopping online. The stock shows that, after rising 180% year-to-date, the gains also reflected strong sales during the pandemic period. EPS turned positive in Q2 at $ 2.54 versus a forecast of 55 cents. In the third quarter, earnings per share were $ 1.80, beating the estimate by 300%. Revenue is also strong, with $ 3.8 billion in the third quarter representing a 66% year-over-year gain. And like Bandwidth above, Wayfair has a strong balance sheet, with $ 2.6 billion in cash and liquid assets reported at the end of the third quarter. These tax gains are based on strong business performance. Wayfair reported 11.3 million repeat customer orders in the third quarter, or nearly 72% of total orders for the quarter. Active customers in the company’s Direct Retail business segment grew 50% year-over-year to 28.8 million. Peter Keith, 5-star analyst at Piper Sandler, writes to Wayfair: “Looking ahead, KPI repeat customers (% of orders) and revenue per average customer (LTM) are both at historic highs and suggest Wayfair will increase revenue well thanks to a larger customer base … We maintain our bullish thesis as above-trend sales growth is expected to persist into at least early 2021, and margins increase significantly. “So it’s no surprise that Keith stays with the bulls. In addition to an overweight (ie buy) rating, he left a price target of $ 370 on the stock. Investors could pocket a gain of 47 %, if that goal is met within the next twelve months. (To look at Keith’s track record, click here) Overall, Wayfair has 20 registered reviews, of which 10 buys, 7 holds and 3 sells, making consensus view of the analyst un B uy. The W action se ven d at $ 251.70 and has an average price target of $ 312.63, which represents upside potential of 24% for the coming months. (See Wayfair’s stock market analysis on TipRanks) Schrodinger (SDGR) Last but not least is Schrodinger, a software company that develops applications for the life science and materials science industries. In short, the company is developing the software platforms that allow customers to evaluate experimental compounds. Schrodinger describes his software as a physics-based platform, integrating solutions for collaboration, data analysis and predictive modeling in chemistry. The platform is widely used in the pharmaceutical industry, but also in the aerospace, energy and semiconductor industries, Schrodinger went public in February of this year, as the corona crisis intensified, and has quickly saw strong share gains. At the IPO, the stock sold for $ 26 a share, well above the original price of $ 17. The company sold over 11.8 million shares, making it one of the most successful of the year. Since then, SDGR shares have more than doubled, gaining nearly 140% in their first nine months of public trading and revenue has remained constant throughout the year, with the first three quarters of 2020 showing the figure of business between 23 and 26 million dollars. The third quarter figure, at $ 25 million, sits in the middle of that range. Q3 top line beat forecast by 10% Covering this stock for BMO, 5-star analyst Do Kim writes, “We believe the 42% year-on-year growth in software revenue reflects accelerated adoption of the computer drug discovery, in addition to a growing customer base. We expect software growth to continue through 2021, as we believe the pandemic trend of remote working is persistent, with increasing validation of the platform from collaborations. Consistent with this bullish outlook, Kim attributes SDGR to outperform (ie buy) with a $ 94 target price. This figure indicates confidence in a potential upside of 37% year on year. (To see Kim’s track record, click here) Overall, Schrodinger’s Strong Buy consensus rating is based on 3 buys and 1 wait. The stock has an average price target of $ 83, giving it a 21% rise from the current price of $ 68.52. (See SDGR Stock Analysis on TipRanks) For great ideas for growth stocks that trade at attractive valuations, visit Top Stocks to Buy from TipRanks, a newly launched tool that pulls all the information about stocks together. from TipRanks.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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