Which stocks are among Wall Street’s most-loved names? Based on analyst activity, the answer is clear: growth stocks. For patient investors, these names can represent compelling opportunities as they are capable of delivering immense returns through the next year and beyond.
While selecting the long-term winners can feel like trying to find a needle in a haystack, there are resources at your disposal, namely TipRanks. I used the platform’s Stock Screener tool to pinpoint five tickers that are stocks to buy. Each stands out as being ready to beat the market in the long-run. And each of these stocks to buy has strong growth prospects backed by substantial upside potential.
Even though no investment is a sure thing, these five names are a great place to start.
Growth Stocks to Buy: Dropbox (DBX)
Online workspace and file hosting company Dropbox (NASDAQ:DBX) has captured the Street’s attention following its third quarter earnings release. Given its solid performance, analysts believe the recent shakiness presents a unique buying opportunity.
For the first time in 11 quarters, revenue growth didn’t decelerate, with the figure coming in at 20%. Part of this gain can be traced to the early success of the “new Dropbox,” which refers to its upgraded platform featuring a new desktop app. The company also launched Dropbox spaces, or its product that transforms traditional shared folders into a connected workspace for all of its customers’ cloud content.
Adding to the good news, churn came in below the consensus estimate and the number of subscribers got a boost in spite of a price increase. That being said, Merrill Lynch analyst Justin Post believes that the company is just starting to tap into its potential. He tells clients that “new Dropbox” could drive an even further reduction in churn, as well as increase upgrades to premium packages and attract new paying subscribers.
This led Post to describe DBX as “attractive”, with shares trading at 4.2x 2020 price-to-sales and 24x price-to-free-cash-flow. He adds that the stock is especially compelling when you consider it trades at a significant discount to several of its peers in the Software-as-a-Service space. Bearing this in mind, the five-star analyst kept his bullish call while slightly lowering the price target from $33 to $32. Even at this new target, shares could soar 70% in the next twelve months.
Similarly, Wall Street has been impressed by DBX. Seven Buy ratings vs 1 Hold assigned in the last three months add up to a Strong Buy consensus. On top of this, its $31 average price target indicates 63% upside potential. See the DBX stock analysis.
Sunnova Energy (NOVA)
As all seven of the analysts that issued ratings in the last three months were bullish, solar energy provider Sunnova Energy International (NYSE:NOVA) is at the top of Wall Street’s must-watch list. With 56% upside potential, it’s easy to see why analysts are picking this Strong Buy.
Despite the fact that shares have faltered recently, Credit Suisse analyst Michael Weinstein thinks that NOVA will come out on top in the long-run. The analyst argues that the company has set itself apart from its competitors thanks to its sales model, which completely relies on third-party installation and independent dealer relationships. He also cites its opex-lean approach that capitalizes customer acquisition costs without in-house install or sales-lead generation expense as giving it the advantage.
Weinstein reminds investors that on top of NOVA’s core business of selling, financing and leasing systems, its expansion to include solar energy credits, batteries and at some point, grid services make the company especially appealing.
The above reasoning prompted Weinstein to start his NOVA coverage with a Buy and set a $14 price target. This implies that shares could surge 38% in the next twelve months. See the NOVA stock analysis.
Adesto Technologies (IOTS)
Semiconductor and embedded systems company Adesto Technologies (NASDAQ:IOTS) has captivated investors with its 60% year-to-date rise. Even so, several members of the Street believe that its growth story is just getting started.
The excitement surrounding this chip stock is partly due to its recent acquisitions, which include S3 Semiconductors and Echelon. Not only did these purchases expand its product portfolio, but they have also brought about new growth opportunities. Based on the record breaking performance in Adesto’s third quarter, it looks like the investment is paying off.
While this is definitely impressive, Loop Capital Markets analyst David Williams cites the company’s positioning as the industry transitions to intelligent control systems as its key strength. He points out that IOTS has already pivoted away from specialty memory with a significant focus now being placed on offering a full stack of open solutions for Internet of Things (IoT) applications. If that wasn’t promising enough, Williams sees “little meaningful competition” in its core segments. This caused the 4.5-star analyst to initiate coverage with a Buy and set a $13 price target. This target conveys his confidence in Adesto’s ability to jump 85% over the next twelve months.
As five Buys were received in the last three months compared to no Holds or Sells, the consensus is unanimous: IOTS is a Strong Buy. It should also be noted that all of these calls were published by the Street’s top-rated analysts. Adding to the good news, its $12 average price target suggests 77% upside potential. See the IOTS stock analysis.
AquaVenture Holdings (WAAS)
Water services provider AquaVenture Holdings (NYSE:WAAS) has Wall Street buzzing on the heels of its recent rally, with investors speculating as to the state of its long-term growth narrative. To put it simply, it remains strong according to the Street’s pros.
After posting third quarter earnings results on Nov. 6, shares popped up 5%. The jump comes as a reaction to the $52.9 million in revenue and $20.4 million in adjusted EBITDA reported by WAAS. These figures are noteworthy as they represent gains of 43.8% and 60.5%, respectively, from the prior-year quarter. While WAAS still saw a loss, the company is making substantial progress in its efforts to add more point-of-use water filtration assets.
During the quarter, WAAS completed its acquisitions of Mirex AquaPure Solutions, L.P. and Flowline Canada, Inc. Not to mention it extended its agreement to deliver wastewater treatment services to the Emerald Bay development in Great Exuma, The Bahamas by nine years.
This played into Lake Street Capital Markets analyst Robert Brown’s conclusion that WAAS will see massive growth in the years to come. He adds that the water services name is especially promising based on its continued operating leverage. As a result, the four-star analyst stayed with the bulls. To top it all off, Brown lifted the price target to $32, bringing the upside potential to 49%.
Likewise, Wall Street takes a bullish stance when it comes to WAAS. As all of the analysts covering the stock view it as a buying proposition, the consensus amounts to a Strong Buy. Its $30 average price target indicates a potential twelve-month gain of 40%. See the WAAS stock analysis.
IntriCon (IIN)
IntriCon (NASDAQ:IIN) is best known for designing, developing and manufacturing hearing aids as well as other biotelemetry devices, or devices used to monitor biological conditions from a distance.
Dougherty analyst Kyle Bauser deems IIN as a key player in the medical technology industry, stating that the company has a solid reach within compelling end markets. In a note to clients, the analyst makes the argument that IIN has been underappreciated by investors when its stellar manufacturing capabilities, high growth end markets and upcoming catalysts are taken into consideration.
These catalysts include its largest customer, Medtronic (NYSE:MDT), expanding its MiniMed 670G Insulin Pump System launch as well as an update regarding Food and Drug Administration hearing aid regulation. A draft for the OTC Hearing Aid Act is expected within the coming weeks, with the final regulation slated for release in the next six months.
To this end, Bauser initiated coverage by issuing a bullish recommendation and attached a $34 price target. This implies shares could skyrocket 82% over the next twelve months.
Other analysts share Bauser’s optimistic view of IIN. With it racking up 100% Street support in the previous three months, the med tech stock earns a Strong Buy consensus rating. Not to mention its $32 average price target brings the upside potential to 73%. See the IIN stock analysis.
TipRanks offers investors the latest insight into eight different sectors by tracking the activity of over 5,000 Wall Street analysts. As of this writing, Maya Sasson did not hold a position in any of the aforementioned securities.
