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3 Monster growth stocks with potential for additional earnings
Ultimately, investors want to see returns. To achieve this goal, seasoned Wall Street watchers often turn to one strategy time and time again: investing in growth. A solid growth game is a name that looks set to not only grow at an above average rate, but also generously reward investors for the long haul. Rolling up their sleeves, investors are pounding the curb on Wall Street in search of tickers with impressive long-term growth prospects. However, having a goal in mind is one thing, but focusing on those stocks that are ready to make gains in the years to come is a whole different story. With that in mind, we adapted and embarked on our own search for investment opportunities with strong growth rhetoric. Using the TipRanks database, we were able to identify 3 Buy-rated tickers that each have considerable upside potential, according to Wall Street analysts. Cowen Group (COWN) We’ll start with Cowen Group, a New York-based investment bank. Cowen provides investment management and brokerage services, and is known as a risk taker ready to jump into disruptive industries early; Cowen was a pioneer in high-tech stocks dot.com, and more recently in the cannabis industry. The main operations of the bank are in the United States and the United Kingdom. The recent growth on the part of the bank has been extreme; since the same period last year, COWN shares have risen 534%. The stock’s appreciation pushed the company’s market cap to over $ 1 billion and provided investors with strong returns during the difficult corona crisis. After declining in 1Q20, the company has posted three consecutive quarters of revenue and year-over-year gains. These gains were particularly impressive in Q2 and Q4; looking at 4Q20, the most recent reported, Cowen posted record quarterly net income of $ 90.5 million, according to GAAP measures; the annual income was $ 209.6 million. Gains were driven by record performance in the investment banking and brokerage divisions. Cowen’s performance impressed Piper Sandler’s 5-star analyst Sumeet Mody, who writes: “We remain very positive on COWN after the good results in 4Q20. After the company’s sustained and strong brokerage and banking activity throughout 2020, earnings outlook has improved significantly as banking pipelines remain strong and brokerage activity started the year strong … higher than expected investment banking and brokerage income, as well as lower expense ratios. To that end, Mody believes Cowen shares an overweight (ie buy), and his price target of $ 71 suggests a 78% year-over-year margin up from current levels. (To look at Mody’s track record, click here) Piper Sandler’s analyst is the bullish outlier here, but Wall Street, for the most part, agrees with him on Cowen, as the 3-to-1 Division shows in favor of Buy to Hold critics. The shares are priced at $ 39.86 and their average price target of $ 47 implies an increase of ~ 18% for the coming year. (See COWN Stock Analysis on TipRanks) Commercial Vehicle Group (CVGI) Talk about the auto industry, and naturally you’ll start talking about auto manufacturers. But the industry is more than that – there is a whole network of parts suppliers and service companies that support automakers, and the commercial vehicle group lives in that niche. The company provides a variety of services to the automotive industry, including warehouse automation, robotic assemblies, seating systems, plastic products, EV assemblies, and mechanical assemblies. Commercial Vehicle Group customers include the commercial truck industry, electric vehicle manufacturers and the e-commerce warehousing industry. The big story here, for CVG, has been the company’s warehouse automation segment. The corona crisis inspired a massive push towards e-commerce, and CVG was a beneficiary. The company’s warehouse automation segment saw higher volume in 2020 – and greater efficiency through cost reduction actions during the year. Fourth quarter revenue was topped $ 216 million, a 14% year-over-year gain. Operating income for the quarter was $ 5 million, a year-over-year gain of $ 9.3 million. The quarterly results marked the first quarterly year-over-year gains for the company in 2020, and come after the company’s shares consistently outperformed over the year. CVGI shares have risen 543% in the past 12 months, far outpacing broader markets. In a move that bodes well for the future, CVG announced earlier this month a partnership with Xos, a commercial EV manufacturer, for the development of sustainability initiatives. Covering this title for Barrington, 5-star analyst Christopher Howe was impressed with the company’s backlog of new business. “The company achieved net new business of over $ 100 million annualized in 2020, primarily through warehouse automation and electric vehicles, all of which are expected to be converted this year. Going forward, he expects to get an additional $ 100 million in net new business in 2021, ”Howe noted. The analyst added “[EV] activity is robust [and] the company anticipates that these programs will remain in the development phase until 2021 and then convert to revenue once product references stabilize. When it comes to warehouse automation, according to Logistics IQ, demand for warehouse automation products is expected to grow by around 14% per year through 2026. ”In light of these comments, Howe assesses at CVGI outperformance (i.e. a buy), with a price target of $ 14 to indicate a year-over-year increase of 39%. (To see Howe’s track record, click here) There are two analyst reviews on file for this company, and they both agree: CVGI is buy stock. The shares have an average price target of $ 14, matching Howe’s. (See CVGI stock market analysis on TipRanks) Zedge, Inc. (ZDGE) We’ll end our review of growth stocks with software industry resident Zedge. This company offers customization options for smartphones, which have proven to be very popular. Zedge’s platform offers wallpapers, ringtones, app icons, widgets, and notification sounds, among other features. The Zedge app has over 450 million installs and over 30 million monthly active users – key metrics in the world of smartphone apps. But perhaps the most telling statistic is this: Zedge has consistently been in the top 25 for free apps on Google Play for the past seven years. That kind of popularity gives a software company a solid foundation, and Zedge’s stock has reaped the rewards. The stock has risen 932% in the past 6 months, a growth that has coincided with revenue growth. Zedge has experienced 5 consecutive quarters of year-over-year revenue growth. The company released its 2Q21 tax results on March 15, and the results broke records for the company. Revenue was $ 5.3 million, net income was $ 2.3 million and EPS was 17 cents. Monthly active users reached 35.4 million. Sales represented a 101% year-over-year gain; EPS was up just 1 cent the year before. Following these gangbuster results, Zedge revised its revenue forecast for the year 2021 upward to a growth forecast of 75% to 80%. Maxim Group analyst Allen Klee is impressed with Zedge and clearly sees the way forward for the company. “Zedge is accelerating its growth with its advertising platform and new offerings. We expect the company to strengthen its ecosystem so that the 35 million monthly active users are more involved in the platform, which will translate into better retention and better monetization. We also expect 2021 to have catalysts for the growth of Shortz’s abridged narrative and new entertainment-style podcasts, ”Klee said. Based on all of the above, Klee assigns a buy rating to the ZDGE shares, along with a price target of $ 24. This target reflects Klee’s confidence in Zedge’s ability to climb 57% over the next twelve months. Some stocks fly under the radar, and ZDGE is one of them. Zedge’s is the company’s only recent analyst review, and it’s decidedly positive. (See ZDGE Stock Analysis on TipRanks) To find 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. by 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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