3 Monster Growth Stocks That Are Still Undervalued
Let’s talk about growth. As the corona recedes, politics gets less exciting, and a New Year approaches, investors are getting bullish – and that means looking for stocks that deliver strong returns. In other words, growth stocks. In a recent interview, Jan Hatzius, chief economist at investment giant Goldman Sachs, said he saw GDP growth of up to 10% in Q221. In such an environment, most stocks will have a growth trend. Now we all know that past performance is no guarantee of future results. The best place to look for tomorrow’s high-growth stocks is yesterday’s winner. With that in mind, we set out to find stocks that Wall Street marked as exciting growth games. Using TipRanks’ database, we picked three analyst-backed names that have already made impressive profits and have solid growth narratives over the long term. Kaleyra (KLR) We start with Kaleyra, a cloud computing company that provides communication solutions. The company’s SaaS platform supports SMS, voice calling, and chatbots – a product with obvious uses and value in today’s office environment, with heavy pressures on teleworking and remote working. Kaleyra has over 3,500 customers making 3 billion voice calls and sending 27 billion text messages in 2019 (the last year with full numbers available). Over the past 6 months, KLR stock has seen a tremendous 155% growth. Kaleyra’s earnings have risen along with its stock value. The company’s results for the third quarter of 20 were $ 38.3 million, the best since KLR went public. While Kaleyra is still posting a net income loss every quarter, its third quarter EPS was the lowest loss of its kind in the last four quarters. Maxim analyst Allen Klee is optimistic about KLR and sees recent growth and product offerings as an indication of future performance. “In the past few years, Kaleyra has seen double-digit sales growth and positive adjusted EBITDA. For 2020-2022 we forecast sales growth of 9%, 22% and 28%. We expect Adjusted EBITDA to decrease in 2020 to reflect the cost of public corporations and COVID-19. In the next two years, however, growth is more than double the sales rate. We expect advantages through operational leverage, low-cost tech employees, cost discounts when expanding the company and margin improvements through new offers and regions. In the long term, we believe that with even faster sales growth, the company can achieve sales of close to 30%, “said Klee. With such growth, it’s no wonder Klee is optimistic about KLR, which issued a Buy recommendation and a target price of That figure implies 45% for the year ahead. (To see Klee’s track record, click here) Overall, based on 3 buy ratings against none in the last three assigned holds or sells Wall Street analysts have been since For months, everyone agreed that this “strong buy” is a solid bet. It doesn’t hurt that its average price target of $ 19 implies an upside potential of ~ 26%. (See KLR stock analysis on TipRanks) Vista Outdoor (VSTO) Next Vista Outdoor is a venerable company whose niche has grown in popularity recently. Vista is a sporting goods company with 40 brands in two major divisions: outdoor products and shooting sports. Vista’s brands include well-known names such as Bushnell Golf, CamelBak and Remington. The company has found a drill Successful in the “Corona year” as people have turned to more and more outdoor activities that can be practiced alone or in small groups – which expands the customer base. As a result, VSTO stocks are up 214% over the past 12 months. Vista’s revenues reflect increased consumer interest in outdoor sports. The company’s earnings per share rose from a net loss to earnings of $ 1.34 per share in its Q2 annual report (released in November) in 2020. The fiscal year third quarter report released earlier this month showed lower earnings of $ 1.31 per share, but was considered solid by the company for covering the winter months when the company typically sees a decline in sales. Both quarters showed strong EPS increases compared to the previous year. 5-star analyst Eric Wold, who covers Vista for B. Riley, sees multiple opportunities for Vista to continue to grow. He is impressed by the growth in sales of firearms and ammunition, as well as the price increase for products in the outdoor area as well as in shooting sports. “Given our expectation that the increased industry participation in both outdoor products and shooting sports during the pandemic will provide VSTO with added tailwind in the years to come, beyond the impressive visibility of production caused by the exhaustion of canal stocks We continue to see an attractive setup for basic growth, ”commented Wold. Overall, Wold is bullish on the stock and rates it as a buy with a price target of $ 41. This figure shows that an upward trend of 27% is possible in the coming year. (To view Wold’s track record, click here.) Vista is another company with a unanimous consensus rating for strong buy. This rating is based on 9 recent ratings, all of which are for sale. VSTO shares have an average price target of $ 36.78, which is an upward trend of 14% from the trading price of $ 32.15. (See VSTO stock analysis on TipRanks) Textainer Group Holdings (TGH) You might not think of the ubiquitous freight container, but these deceptively simple metal boxes have changed the face of bulk shipping since they first became popular in the 1960s. These containers make it easier to organize, load, dispatch and track large amounts of cargo and are particularly valuable for easy switching. Containers can be quickly loaded onto ships, trains and trucks or switched between them. Textainer is a billion dollar company that buys, owns and leases shipping containers for the freight industry. The company has over 250 customers and a fleet of 3 million TEU (twenty-foot equivalent units). Textainer is also a major used container reseller and operates 500 depots around the world. Even during the corona pandemic, when international trade routes and patterns were severely disrupted and quarterly sales declined year-on-year, Textainer made stock gains. The company’s stock rose 110% over the past 12 months. The bulk of those gains were made in the past six months as the economies – and trade patterns – began to reopen. Daniel Day, analyst viewing Textainer for B. Riley, is deeply impressed. He sees this company as the most affordable of its peer group with a strong market share in a competitive industry. TGH a Buy price today, and its target price of $ 31 suggests it has room for 57% growth. In support of this bullish stance, Day writes in part: “We believe that TGH is a misunderstood name below that is ideal for the portfolio of a deep value investor looking for cash flow generative names that are heavily discounted to the intrinsic value are traded. With new container prices at multi-year highs amid a revival in container shipping, we expect upcoming earnings results to be positive catalyst events for TGH … “Some stocks are flying under the radar, and TGH is one of them. Day’s is the only recent analyst rating for this company and it is extremely positive. (See TGH stock analysis on TipRanks.) To find great ideas for trading growth stocks at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that brings together all of the insights into TipRanks stocks. Disclaimer: The opinions expressed in this article are solely those of the analysts presented. The content is intended to be used for informational purposes only. It is very important that you do your own analysis before making any investment.