Growth stocks have been on a roll recently, and that’s not really much news to anyone. However, what is new is that the recent inflation report is starting to show very promising signs. Inflation has cooled further to 3%, a mere percentage point above the Federal Reserve’s target.
Even better, the very sticky core CPI metric slid down to 4.8%. That may seem a little high, but it is also important to remember that shelter is the only indicator that is driving up the core inflation numbers. This lagging metric will fall in the coming months too, and it’ll be foolish to think that the Fed is not aware.
That’s why I anticipate that interest rates are unlikely to rise much further from here. Yes, the labor market remains very tight, but even that has seen a slight cooldown in recent months. Better ways exist to stimulate the workforce rather than increasing interest rates continuously.
Growth stocks that remain depressed will be the first to benefit from such an environment. Let’s look at three that can skyrocket.
Globant (GLOB)
Globant (NYSE:GLOB) is a software technology developer based in Luxemburg that creates platforms powered by native digital technology, better known as digital journeys. The digital journey incorporates various software products, mobile apps, and sensors that assist its clients in knowing their end user’s behavioral patterns.
Globant stock is starting its turnaround, and the current entry point seems very compelling after its sustained decline since November 2021. The stock has fallen from its all-time high of $240 in November 2021 to around $185 as of July 13, 2023, a drop of over 45%.
However, I believe a lot of potential is untapped here. As the demand for software and IT services is booming, more businesses undergo digital transformation in the post-pandemic world. Thus, I think Globant is well-positioned to capitalize on this trend with its expertise across various industries.
Moreover, the company’s base in many developing countries allows it to have higher margins, continuing profitability. Globant has operations in Latin America, Europe, Asia, and Africa, where it can leverage lower labor costs and tap into emerging markets. In fact, this company has enjoyed ten years of profitability, which is better than 99.95% of software companies, per Gurufocus.
Plus, Globant has been growing its revenue and earnings quite impressively. In the first quarter of 2023, the company reported revenue of $472.4 million, up 17.7% year over year. Analysts believe this growth will accelerate to ~25% over the next two years.
With that in mind, I believe Globant is a great growth stock to buy now before it resumes its upward trajectory.
Luminar Technologies (LAZR)
Luminar Technologies (NASDAQ:LAZR) is one company I’ve been very bullish on for the past few months.
It specializes in lidar technology that helps self-driving vehicles detect their surroundings. Lidar is a type of sensor that uses laser beams to measure distances and create 3D maps of the environment. This tech is much better than what EVs use today for self driving. This company leads the lidar sector, and I think it is on the cusp of a major breakout to the upside as more investors realize the deep value.
The indirect EV play offers a much better deal than many other EV businesses due to the combination of value and growth, despite the moderate speculation. The stock has been trading at an 80% discount from its peak, not reflecting the company’s huge potential in the autonomous driving market.
Still, Luminar is already growing tremendously, and lidar technology is quickly becoming a winner in the EV sector. The company has secured partnerships with several major automakers to integrate its lidar sensors into their vehicles. Luminar expects to have 50% market share by 2030.
Of course, radar is often chosen instead of lidar. But the latter technology continues to get more and more inexpensive. The cost of lidar is the biggest caveat, and as that is solved, Luminar will likely emerge as a clear winner in this field. Luminar claims that its lidar sensors are cheaper, more reliable, and more scalable than its competitors and that it can achieve positive cash flow by 2024. This also diminishes the profitability concerns that have been plaguing this company.
Analysts expect triple-digit revenue growth for the foreseeable future. It is expected to reach 112% year-over-year growth and 207% growth next year. Very impressive!
ANTA Sports Products (ANPDY)
ANTA Sports Products (OTCMKTS:ANPDY) is a Chinese sportswear company that designs, develops, manufactures, and markets sports apparel, footwear, and accessories. The company also owns several other brands, such as Fila, Descente, Kolon Sport, and Sprandi.
The recent slowdown of the company’s growth has caused the stock to slump. But that slump has opened up a lot of opportunities, and the future growth metrics remain very attractive. Analysts expect its revenue to grow by 11.36% YOY and 16% next year. At the same time, the company has been steadily increasing its store count, expanding its presence in both domestic and overseas markets.
Moreover, the company benefits from the rising demand for sportswear in China and other emerging markets. The driving forces are the growing middle class, increasing health awareness, and the popularity of sports events. A 1.76% dividend yield further enhances ANPDY’s attractive valuation. Snap it up while it runs at a discount!
On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
