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3 Shares of monstrous growth that are still undervalued
Let’s talk about growth. With the corona retreating, politics becoming less exciting and a new year ahead, investors are becoming optimistic – and that means that there is a search for stocks that will bring solid returns. In other words, growth actions. In a recent interview, Jan Hatzius, chief economist at investment giant Goldman Sachs, said he sees GDP growth in 2Q21 reaching 10%. In such an environment, most shares will show a growth trend. Now, we all know that past performance does not guarantee future results. Still, the best place to start looking for tomorrow’s high-growth stocks are yesterday’s winners. With that in mind, we set out to find stocks signaled stimulating growth across Wall Street. Using the TipRanks database, we focus on three names supported by analysts who have already made impressive gains and present solid growth narratives for the long term. Kaleyra (KLR) We will start with Kaleyra, a cloud computing company that offers communication solutions. The company’s SaaS platform supports SMS, voice calls and chatbots – a product with obvious applications and value in today’s office climate, with a strong push for telecommuting and remote work. Kaleyra has more than 3,500 customers, who made 3 billion voice calls and sent 27 billion text messages in 2019 (the last year with full numbers available). In the past 6 months, KLR’s shares have shown tremendous growth, valuing 155%. Kaleyra’s revenues grew along with the value of the shares. The company’s results in 3Q20 reached US $ 38.3 million, the best since KLR went public. Although Kaleyra still has a loss of net income each quarter, EPS in the third quarter was the smallest loss in the past four quarters. Maxim analyst Allen Klee is optimistic about KLR, seeing recent growth and product offerings as indicators of future performance. “In recent years, Kaleyra has shown double-digit revenue growth and positive adjusted EBITDA. We forecast revenue growth of 9%, 22% and 28% for 2020-2022. We forecast declines in adjusted EBITDA in 2020 to reflect the costs of public companies and COVID-19, but a growth of more than twice the revenue rate in the following two years. We expect operational leverage benefits, low-cost technology employees, volume cost discounts as the company expands, and improved margins for new offers and geographies. In the long run, we believe that the company can increase revenue by around 30% with even faster growth, “said Klee. With this growth, it is no wonder that Klee adopts an optimistic stance towards KLR. To launch its coverage, the analyst published a Buy rating and set a $ 22 price target. This figure implies 45% for the next year. (To view Klee’s history, click here) Overall, based on the 3 ratings Purchase vs. no waiting or sales attributed in the past three months, Wall Street analysts agree that this ‘strong buy’ is a solid bet, nor does it detract from the fact that its $ 19 average price target implies a potential for appreciation of ~ 26%. (See KLR stock analysis at TipRanks) up, Vista Outdoor, is a venerable company that has seen its niche gain in attractiveness recently. Vista is a sporting goods company with 40 brands in two main divisions: activit products outdoor adhesion and sport shooting. Vista brands include well-known names like Bushnell Golf, CamelBak and Remington. The company found a successful ts drill in the ‘corona year’ as people increasingly turned to outdoor activities that can be practiced individually or in small groups – expanding the customer base. As a result, VSTO’s shares rose 214% in the last 12 months. Vista’s earnings reflect increased consumer interest in outdoor sports. The company’s EPS grew in 2020, going from a net loss to a profit of $ 1.34 per share in the second quarter’s fiscal report (released in November). The third quarter fiscal report, released earlier this month, showed lower earnings, at $ 1.31 per share, but was still considered solid by the company, as it covered the winter months, when the company typically sees a drop in recipe. Both quarters showed strong EPS gains over the previous year. Covering Vista for B. Riley, 5-star analyst Eric Wold sees several avenues for Vista’s continued growth. He is impressed by the growth in sales of firearms and ammunition and the increase in product prices for both outdoor activities and the sport shooting divisions. “Given our expectation that increasing numbers of industry participation for outdoor products and shooting sports during the pandemic will represent a wind in favor of VSTO in the coming years, in addition to the impressive production visibility that was created by the levels of stock of exhausted channels, we continue to see an attractive configuration for the growth of the baseline ”, commented Wold. Overall, Wold is optimistic about the shares and values them as Buy, with a target price of $ 41. This figure indicates room for a 27% rise next year. (To see Wold’s track record, click here) Vista is another company with a strong unanimous purchase consensus rating. This rating is based on 9 recent reviews, all to buy. VSTO shares have an average target price of $ 36.78, which represents a 14% increase from the $ 32.15 trading price. (See VSTO stock analysis at TipRanks) Textainer Group Holdings (TGH) You may not think about the ubiquitous cargo container, but these seemingly simple metal boxes have changed the face of bulk transport since their proliferation in the 1960s. containers make it easier to organize, load, ship and track large quantities of cargo and are especially valuable for their ease of exchange; containers can be loaded quickly or switched between ships, trains and trucks. Textainer is a billion dollar company that buys, owns and rents containers for the cargo industry. The company has more than 250 customers and has a fleet of 3 million units equivalent to twenty feet (TEUs). Textainer is also a major reseller of used containers and operates in 500 warehouses worldwide. Even during the corona pandemic, when international trade routes and patterns were severely disrupted and quarterly revenues fell year on year, Textainer achieved participation gains. The company’s stock has soared 110% in the past 12 months. Most of those gains came in the past six months, as economies – and trade patterns – began to reopen. Looking at Textainer for B. Riley, analyst Daniel Day is deeply impressed. He sees this company as the lowest price among his group of competitors, with a strong market share in a competitive sector. Daily rates TGH as Buy, and its target price of $ 31 suggests that there is room for 57% growth ahead. In support of this optimistic stance, Day writes, in part: “We believe that TGH is a subsequent and poorly understood name, ideal for the portfolio of a deep-value investor looking for cash-generating names traded at a huge discount on relation to the intrinsic value. With new container prices at multi-year highs amid a resurgence in container shipping, we expect the next earnings results to be positive catalyst events for TGH … ”Some stocks fly under the radar, and TGH is one of them. Day’s is the only recent review by analysts at this company, and it is decidedly positive. (See TGH’s stock analysis on TipRanks) To find good ideas for trading growth stocks with attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that brings together all TipRanks stock insights. Disclaimer: The opinions expressed in this article are exclusively those of the analysts presented. The content should be used for informational purposes only. It is very important to do your own analysis before making any investments.