Growth stocks still have a lot to offer investors. While many big-name growth stocks have been knocked off their perch this year because of the rotation into the reopening trade, many of these beaten down securities still have a great long-term outlook.
For example, during the current earnings season, technology and growth stocks outperformed across the board, beating analyst expectations by a country mile. Plus, their underlying fundamentals, market share and product pipelines remain extremely strong.
So, bucking current trends, this article will embrace growth by looking at seven of best names that are currently flying under investors’ radars. Here they are:
- Twitter (NYSE:TWTR)
- Western Digital (NASDAQ:WDC)
- Nautilus (NYSE:NLS)
- Palo Alto Networks (NYSE:PANW)
- Sunrun (NASDAQ:RUN)
- Baidu (NASDAQ:BIDU)
- Salesforce (NYSE:CRM)
Best Growth Stocks to Buy: Twitter (TWTR)
Twitter is so familiar to us that it can be hard to think of it as one the growth stocks flying under the radar. However, despite its role in our daily lives, TWTR stock hasn’t been getting much attention from investors lately.
After cresting at $80.75 on Feb. 25, the share price has come down over 32% and now changes hands at around $54. Investors have largely ignored the social media giant despite the fact that online advertising is rebounding within the broader economy. In its most recent earnings report, Twitter also noted that its monetizable daily active users rose about 20% to 199 million.
The company also reported revenue of $1.04 billion for the first-quarter of this year, up 28% year-over-year (YOY). Additionally, earnings per share (EPS) came in at 16 cents, better than the 14 cents that analysts had expected.
However, TWTR stock sunk further on its latest earnings after the company lowered its guidance for the current Q2, saying it now expects revenue between $980 million and $1.08 billion. But this lower guidance does not change the fact that Twitter remains a unique social media company with plenty of remaining growth potential.
Western Digital (WDC)
If there’s one technology company that should be on your radar, it’s Western Digital. This California-based company specializes in data storage and designs, manufacturing and selling data-storage devices, data-center systems and cloud-storage services.
With data use overwhelmingly on the rise, business at Western Digital is booming. For example, the company reported non-GAAP EPS of $1.02 for its most recent quarter, above the 68 cents anticipated by analysts. WDC also raised its forward guidance.
Moreover, analysts were impressed enough with Western Digital’s results that they raised their price targets on WDC stock. Investment bank Morgan Stanley raised its rating on the stock to “overweight” and lifted its price target to $88 from $84.
Today, this pick of the growth stocks is up over 30% year-to-date (YTD) at around $73. Over the past 12 months, the stock has risen about 70%. Finally, based on the ratings of analysts, more growth can be expected for WDC stock in the coming months.
Best Growth Stocks to Buy: Nautilus (NLS)
It’s been all about Peloton (NASDAQ:PTON) during the pandemic, but what about rival exercise equipment manufacturer Nautilus?
This Washington-based company makes a line of signature workout equipment that includes treadmills, exercise bikes and elliptical machines. It also owns exercise equipment brands like Bowflex and is aiming to take market share from Peloton by moving into the subscription-based fitness business.
When it comes to price and valuation, NLS stock is also much more affordable and offers better growth potential than rival Peloton. Nautilus stock is down almost 43% from its February high and now trades at about $18. Compare that to PTON stock, which sits at just over $100 per share.
Right now, Nautilus stock is down despite a blowout Q1, with revenue of $206.1 million, up 120% YOY. That was well above the $159.2 million expected by analysts. Plus, with Peloton currently mired in a treadmill recall, there’s never been a better time to own this one of the growth stocks.
Palo Alto Networks (PANW)
Recently, Palo Alto Networks finally got some attention from investors following the cyber-attack on the Colonial Pipeline, the largest gasoline pipeline in the United States.
How so? Suddenly, cyber crimes and the security needed to protect against them was top of mind with the media, politicians and investors. This attention was no doubt welcomed by PANW stock shareholders, who have watched as this pick languish so far this year. Today, this stock is down about 11% from its 52-week high, changing hands now at around $360.
In its second quarter, revenue also “crossed the $1-billion mark for the first time.” The company’s EPS rose 30% to $1.55, too, beating analyst forecasts. Additionally, the company recently reported its Q3 earnings on May 20. That report also smashed estimates. Demand for Palo Alto Networks’ cybersecurity services is only growing.
Best Growth Stocks to Buy: Sunrun (RUN)
Next up on this list of growth stocks is Sunrun, a maker of residential solar panels and home batteries.
This company has a huge market opportunity in front of it. Currently, Sunrun has over 550,000 customers, “the highest among all residential solar installers.” Yet, the residential solar market’s penetration is currently less than 3%, suggesting that there’s plenty of room for future growth here. Despite this enormous potential, RUN stock currently trades for around $45. That’s a little over half the median price target of $81 expected by analysts who cover the company.
Despite the share-price depreciation, though, analysts seem to be doubling down on their positive ratings for RUN stock. Piper Sandler recently upgraded the stock to “overweight,” saying investors should view the shares as on sale right now.
True, this stock has been harmed by some supply chain issues (which have largely been resolved) as well as the fact that Sunrun is operating in an emerging field. However, moving forward, Wall Street sees nothing but upside for this company and RUN stock.
Baidu (BIDU)
Baidu is one of the more beaten down Chinese tech companies, but it still presents a tremendous growth opportunity for patient investors. Often referred to as “China’s Google,” BIDU just reported blowout quarterly results on the strength of its growing diversification into areas like cloud computing, artificial intelligence (AI) and autonomous driving. Baidu said its revenue rose 25% to 28.13 billion yuan ($4.38 billion) in Q1, boosted by non-marketing revenue growth of 70%.
Moreover, this tech giant continues to hold its own with its widely used search engine, despite growing competition from rivals like Alibaba (NYSE:BABA) and Bytedance. Baidu is also riding high on the strength of its streaming platform, iQiyi, which posted an increase in revenue during the quarter. That platform’s subscribers even grew to a total of 105.3 million users in the quarter. The bottom line? Baidu is firing on all cylinders.
Despite its success, BIDU stock has been knocked down 46% since its mid-February high. It now sits at around $191 per share. However, the company’s continued strengths should pull the stock higher.
Best Growth Stocks to Buy: Salesforce (CRM)
Last up on this list of growth stocks is CRM stock.
Cloud computing is still one of the biggest growth areas in technology. Moreover, California-based Salesforce is currently an industry leader in the red-hot segment.
Sadly, though, CRM stock cannot get good attention these days. Instead, many investors have turned a cold shoulder to Salesforce and started focusing on value and cyclical stocks — both of which are expected to perform well as the economy runs flat out again.
Today, CRM stock has fallen off a cliff since hitting its 52-week high of $284.50, down 21% to its current levels around $223. The stock has largely been trading sideways since March of this year. However, analysts and investors who still believe in Salesforce and its cloud-computing dominance argue that the stock is merely consolidating before its next move higher. Right now, the median price target on this stock is $273, suggesting 22% potential upside from here.
On the date of publication, Joel Baglole held long positions in BIDU, BABA and CRM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
