Identifying growth stocks to buy at this time, especially at their 52-week lows, can be challenging. With the market trending upward, current optimism suggests fewer stocks near their lows. Moreover, with the Federal Reserve’s plans for three rate cuts this year, it will only get tougher.
Growth stocks, known for their potential for rapid top-and-bottom-line expansion, are usually the stock market’s biggest winners. They are the apples of investors’ eyes but can negatively impact the prices of even the most promising growth stocks due to temporary setbacks and overreactions to the news. That’s probably when savvy investors must rush in and take advantage of the situation.
With that in mind, let’s explore three growth stocks that are trading within 15% above their 52-week lows, pointing to robust investment potential.
Fiverr International (FVRR)
Online freelance services marketplace Fiverr International (NYSE:FVRR) saw its shares tank following a so-so Q4 earnings report. It missed top-line estimates by $1.05 million, while its Q1 guidance came up surprisingly short of analyst estimates.
However, given the challenging macroeconomic backdrop in 2023, last year was a step in the right direction for Fiverr International. It was marred by a wave of layoffs, hiring freezes, geopolitical uncertainties, and AI-led disruptions. Nevertheless, FVRR maintained its impressive probability profile, with an 83% gross margin and a 16.50% free-cash-flow (FCF) margin.
Moreover, the company has embraced AI. FVRR actively integrates the novel technology into its services, thereby improving its service quality and potentially increasing transaction sizes.
FVRR CEO Micha Kaufman believes that AI created a net positive impact of roughly 4% on the company last year. Additionally, Fiverr International will continue benefitting from the secular shift toward flexible employment models, an evolving freelance workforce, and a growing demand for a skill-specific labor force.
Yeti Holdings (YETI)
Yeti Holdings (NYSE:YETI) is one of the top providers of outdoor products, gaining significant momentum during the pandemic. Some of the products it provides include backpacks, coolers, and drinkware. As we advance, Statista estimates that the market for outdoor equipment is expected to grow by roughly 6% to a whopping $32.82 billion from 2024 to 2028.
However, YETI stock took a hit last month after the company missed estimates in its Q4 earnings report and posted cautious guidance. Nevertheless, the quarter had plenty of positives, including the return to positive growth in cooler and equipment sales. The M-series soft cooler relaunch was a challenge. But, the company’s proactive efforts in redesign helped result in a 26% jump in the segment’s sales to $165 million. Moreover, YETI plans to expand product colorways and ramp up marketing efforts to kick things up a notch or two in the upcoming quarters.
Overall sales during Q4 were up 16% year-over-year (YOY), marked by double-digit growth in direct-to-consumer and wholesale channel sales. Furthermore, introducing new pricing tiers and product enhancements this year could add new layers to its growth story.
Exact Sciences (EXAS)
Exact Sciences (NASDAQ:EXAS) is known for its cancer diagnostic tools, particularly its colorectal screening test in Cologuard. However, its portfolio beyond Cologuard remains underappreciated, which can form a much larger proportion of sales down the road. Overall, EXAS operates a growing business. For example, top-line has expanded by almost 49% on average in the past five years.
Moreover, its YOY revenue growth stands at an impressive 20%, dwarfing the sector median by 214%. Its Q4 results showed a 17% YOY increase in the top line to $647 million. Moreover, cash from operations increased by roughly 34% to $69.5 million from Q4 2022.
As discussed earlier, sales from tests other than Cologuard have been rising at a healthy pace. For instance, its Oncoptype tests measuring the recurrence of breast and colon cancer jumped 48% in Q4 compared to the prior-year period. Moreover, the company expects annualized sales of the Precision Oncology segment to rise to a whopping $1 billion from $640 million last quarter. In doing so, the company plans to expand into new territories and launch news tests shortly.
On the date of publication, Muslim Farooque 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
