In dynamic stock investments, pursuing the next big opportunity often leads investors to seek promising ventures with the potential for substantial growth. Among the plethora of options, three stocks under $15 are emerging as strong contenders, projected to triple in value by 2026.
The first one, the electric vehicle (EV) giant, suggests strategic dominance in China. The company solidifies its market presence and surpasses competitors. With its unique value proposition, the second one reports robust financials and anticipates profitable quarters ahead. The third one, making waves in the financial sector, boasts an impressive customer acquisition rate, positioning itself as a significant player in Brazil and beyond.
The article delves into the financial landscapes of the trio and extracts key points from their recent performances. Read more to learn why these stocks might be the next big thing in the market.
Nio (NIO)
Nio (NYSE:NIO) dominates China’s EV segment. Particularly in Q3 2023, the company progressed with its strategic positioning and strong market presence. According to Cathart, Nio secured the top position in China’s EV segment and attained a market share above 45%, suggesting a remarkable level of market penetration.
Fundamentally, China’s EV market is one of the most dynamic and competitive globally, with multiple domestic and international automakers hunting for market share. Here, Nio’s ability to become and sustain itself as a leader in this space suggests the company’s effective market positioning.
Moreover, the average construction price of more than RMB300,000 highlights Nio’s focus on the premium segment. While some market players may target mass-market affordability, Nio’s strategy to cater to the higher end of the market allows for higher profit margins and a perception of exclusivity. This approach aligns with the broader trends in the automotive industry, where premium EVs are gaining traction among discerning consumers.
Nio’s lead in the premium segment is not solely based on pricing but also on the quality and features embedded in its EVs. The launch of the All-New EC6, a midsize coupe SUV upgraded to the second generation, represents Nio’s focus on product diversification. The completion of Nio’s product line-up on the NT2.0 platform positions the company to offer a diverse range of vehicles, targeting different preferences within the premium segment.
Finally, the company maintains an extensive and well-managed sales and service network. Specifically, Nio has 468 new houses, new spaces, and pop-up stores in 152 cities, 314 service centers, and 62 delivery centers in 217 cities (as of Q3 2023). Hence, this provides a solid infrastructure for customer support, fostering loyalty and repeat business.
SoFi (SOFI)
From a balance sheet perspective, SoFi’s (NASDAQ:SOFI) unique value proposition drove high-quality deposits, increasing by a record $2.9 billion sequentially (Q3 2023). Total deposits reached nearly $15.7 billion, with more than 90% coming from sticky direct deposit customers. The company maintained a strong liquidity position, with cash standing at $2.8 billion. Also, tangible book value showed consistent growth for the third consecutive quarter, increasing by a record $68 million at the consolidated level.
SoFi added 717,000 new members in Q3 regarding member and product metrics. As a result, the total reached nearly 7 million—a remarkable 47% year-over-year increase. On the other hand, the product suite also witnessed a record quarter, with new products totaling $1 million. This led to the total products reaching $10.4 million at quarter-end, a growth of 45% year-over-year. Despite rapid member growth, the overall product per member remained at 1.5 times, indicating a solid appeal and adoption of the multiproduct suite.
Looking forward, SoFi provided a positive outlook. The company is anticipating GAAP profitability for Q4 and subsequent years. In detail, the Technology Platform segment is expected to experience an acceleration in year-over-year growth into Q4. This may be driven by new partners and increased product adoption. Financial guidance for 2023 includes adjusted net revenue with 33% to 34% year-over-year growth, with an adjusted EBITDA indicating a 19% margin.
Finally, at the segment level, all three business segments—lending, technology platforms, and financial services, experienced strong year-over-year growth. The lending segment delivered a 15% increase in adjusted net revenue. Meanwhile, the technology platform achieved a record contribution margin of 36%, and the financial services segment experienced a solid 142% year-over-year net revenue growth.
Nu (NU)
Nu (NYSE:NU) is capitalizing on remarkable customer growth. For instance, in Q3 2023, showcasing a robust upward trajectory. The company is exceeding expectations with more than 89 million customers as of Q3 2023, suggesting a rapid pace of customer acquisition.
In detail, there is a monthly customer acquisition rate of slightly more than 1.5 million in key markets such as Brazil, Mexico, and Colombia. Notably, over the past 12 months, Nu has outpaced Brazil’s five largest incumbent banks combined customer base growth. This indicates that the company can consistently attract and onboard many customers within a short time frame.
Furthermore, the company is the fourth-largest financial institution in Brazil (in terms of the number of customers), underscoring Nu’s solid market presence. Also, there is growth in Mexico, with over 700K new customers in Q3, demonstrating the effectiveness of Nu’s strategies, such as the rollout of Cuenta Nu and the member-to-member referral programs.
Nu Holdings also experienced a substantial surge in revenue. In Q3, revenue marked a 53% year-over-year increase, with the gross profit doubling year-over-year and the gross margin expanding to 43%, reinforcing the positive trajectory initiated in 2022. Therefore, these trends indicate the company’s ability to translate customer growth into solid revenue.
Finally, the company reached significant milestones, surpassing 90 million customers in October 2023. The growth in the customer base has resulted in a more than fourfold increase in quarterly revenues in just two years on an FX-neutral basis, translating to a triple-digit annual compounded growth rate.
As of this writing, Yiannis Zourmpanos held a long position in SOFI. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
