Let's talk about growth. With the corona receding, politics less exciting and a new year ahead, investors are getting bullish – and that means there is a search for stocks that will deliver strong returns. In other words, growth stocks.
In a recent interview Jan Hatzius, chief economist at investment giant Goldman Sachs, said he sees GDP growth reaching 10% in 2Q21. In such an environment, most stocks will show a growth trend.
We all know that past performance is no guarantee of future results. Still, the best place to look for tomorrow's fast-growing stocks is one of yesterday's winners.
With this in mind, we looked for stocks that Wall Street identified as exciting growth. Using the Investing Insights platform, we joined three analyst-backed names that have already made impressive gains and have a Perfect 10 of the Smart Score metric. Here are the details.
Kaleyra (KLR)
We start with Kaleyra (NYSE :), a cloud computing company that provides communications solutions. The company's SaaS platform supports text messages, voice calls and chatbots – a product with clear applications and value in today's office environment, with a strong boost for home and remote working. Kaleyra has more than 3,500 customers who made 3 billion calls and sent 27 billion text messages in 2019 (last year with full numbers available).
In the past 6 months, KLR shares have shown tremendous growth, with a valuation of 155%. Kaleyra's earnings have grown along with its stock value. The company's 3Q20 earnings reached $ 38.3 million, the best since KLR went public. While Kaleyra continues to experience a net profit loss every quarter, earnings per share in the third quarter was the lowest loss in the last four quarters.
Maxim (NASDAQ 🙂 analyst Allen Klee is optimistic about KLR and sees recent growth and product offering as an indication of future performance.
“In recent years, Kaleyra has delivered double digit sales growth and positive adjusted EBITDA. We forecast revenue growth of 9%, 22% and 28% for 2020-2022. We expect adjusted EBITDA to decline in 2020 to reflect costs of the listed companies and COVID-19, but growth at more than twice the rate of revenue for the next two years. We expect benefits from operating leverage, low-cost tech, cost volume discounts as the business grows, and margin improvement through new offerings and geographic locations. In the longer term, we think the company can grow sales by nearly 30% with even faster net growth, ”said Klee.
With such growth, it is no wonder Klee is taking a bullish stance on KLR. To start his coverage, the analyst posted a Buy rating and set a price target of $ 22. This figure implies a 45% for the coming year.
Overall, Wall Street analysts agree that this "Strong Buy" is a solid bet, based on the 3 Buy ratings versus no Holds or Sells awarded in the past three months. It also doesn't hurt that the $ 19 average price target implies 26% upside potential. (See KLR Stock Analysis)
Vista Outdoor (VSTO)
Next up is Vista Outdoor Inc (NYSE :), a venerable company that has seen its niche gain in popularity recently. Vista is a sporting goods company, with 40 brands in two main divisions: outdoor products and shooting sports. Vista's brands include well-known names such as Bushnell Golf, CamelBak and Remington. The company has had a burst of success in the "corona year" as people have increasingly moved to outdoor activities that can be enjoyed alone or in small groups – expanding its customer base. The VSTO share has therefore increased by 214% in the past 12 months.
Vista's revenues reflect increased consumer interest in outdoor sports. The company's earnings per share grew in 2020 and changed from a net loss to earnings per share of $ 1.34 per share in the fiscal Q2 report (released November). The fiscal Q3 report, released earlier this month, showed a lower earnings of $ 1.31 per share, but was still considered solid by the company as it covered winter months when the company normally sees a decline in sales . Both quarters showed strong earnings per share year on year.
With regard to Vista for B. Riley, five star analyst Eric Wold sees several opportunities for Vista to grow further. He is impressed by the growth in the sale of firearms and ammunition, and by the increase in prices for products in both the outdoor and sport shooting divisions.
“Given our expectation that the increased industry participation rates for both outdoor products and shooting sports during the pandemic will mean an incremental tailwind for VSTO in the years to come, beyond the impressive visibility of production created by depleted channel inventory levels , continue to see an attractive setup for baseline growth, ”noted Wold.
Overall, Wold is optimistic about the stock and views it as a buy, with a target price of $ 41. This figure indicates that there is room for 27% upside potential next year.
Vista is another company with a unanimous Strong Buy consensus rating. That rating is based on 9 recent reviews, all for sale. VSTO shares have an average price target of $ 36.78, which is an increase of 14% from the trading price of $ 32.15. (See VSTO stock analysis)
Textainer Group Holdings (TGH)
You may not think of the ubiquitous freight container, but these deceptively simple metal boxes have changed the face of bulk transport since their outbreak in the 1960s. These containers make it easy to organize, load, ship and track large amounts of cargo, and are especially valuable because they can be easily switched; containers can be quickly loaded on or switched between ships, trains and trucks.
Textainer Group Holdings (NYSE 🙂 is a multi-billion dollar company that buys, owns and leases shipping containers for the freight industry. The company has more than 250 customers and a fleet of 3 million twenty foot equivalent units (TEUs). Textainer is also a major reseller of used containers and operates from 500 depots around the world.
Even during the corona pandemic, when international trade routes and patterns were severely disrupted and quarterly revenues fell year-over-year, Textainer saw market share gains. The company's stock is up 110% in the last 12 months. Most of these gains have been made in the past six months as economies – and trade patterns – reopen.
Looking at Textainer for B. Riley, analyst Daniel Day is deeply impressed. He considers this company the lowest priced among its peer group, with a strong market share in a competitive industry. TGH a Buy daily rates, and its price target of $ 31 suggests there is room for a 57% rise.
In support of this optimistic stance, Day writes in part, “We believe that TGH is a non-trailing, misunderstood name that is ideal for the portfolio of a high-value investor looking for cash-flow-generating names that can be traded at a sharp discount. to intrinsic value. With new container prices at multi-year highs amid a resurgence in container traffic, we expect upcoming earnings results to be positive catalyst events for TGH … "
Some files are flying under the radar, and TGH is one of them. Day & # 39; s is the only recent analyst review of this company and it is decidedly positive. (See TGH Stock Analysis)
Visit Investing Insights for more ideas for stocks that trade at attractive valuations.
