With any investment, performing careful due diligence is a must. From careful industry analysis to financial modeling, pinpointing investments that will truly bring growth to any portfolio is difficult. Most times, unlocking a unique perspective is the difficult part. From talking to former company employees for deeper insights, carefully doing diligence to identify key catalysts or finding what really drives a company’s moat, these are all important elements to developing an investment thesis.
Of course, developing a perspective all by yourself can be difficult. This is where analyst coverage and differing opinions come into play. Analysts from websites like Yahoo Finance and Seeking Alpha, or even Street analysts, can be crucial in developing a more nuanced understanding of any investments. As such, here are three analyst-backed stocks that are on the brink of explosive gains.
Trip.com (TCOM)
Trip.com (NASDAQ:TCOM) is China’s leading one-stop platform that offers a range of travel products and services. Despite recent challenges in the travel industry due to the pandemic, Trip.com recently achieved record-breaking results. It is ready to recapture a huge customer base. As a testament to its optimism, Wall Street and quant analysts put this stock as a strong buy. Yahoo Finance analysts expect a one-year price target between an average of $55.69 and a high of $72.
The market rebound of the tourism market in 2023 is evident given TCOM’s recent growth. In its recent FY2023 annual report, TCOM witnessed a net revenue up 122.11% and a net income jump of more than 600%! Despite such strong growth,TCOM is undervalued. It has a price-to-earnings growth (PEG) ratio of 0.82x as compared to its sector median of 1.55x. Given the Chinese government’s efforts to revive tourism, analysts including ourselves expect a normalization of their stock price by 2024. That should allow TCOM to capitalize on a resurgence in demand.
Ares Management (ARES)
Ares Management (NYSE:ARES) is a global investment manager offering investment solutions across asset classes. Those include real estate, private equity and infrastructure. Yahoo Finance analysts estimate it will trade within a one-year price range of $126 to $157 per share, averaging at around $143.50.
Ares Management’s past growth foreshadows a future of likely consistent and increased future growth. Its current year-over-year (YoY) revenue growth rate of 18.87% stands about 250% above its sector’s median of 5.47%. This displays its ability to stand above its competition. Additionally, EBITDA-wise, it stands about 21% above its sector median of 9.26%. Coupled with analyst projections set to continue this trajectory, Ares offers a dominant position in an already saturated market.
Despite difficulties across its industry to raise funds, Ares Management just completed its second-largest fundraising year of over $110 billion. This financial capital will allow it to reinvest in itself and remain proactive in its space. As such, we remain optimistic about Ares as a great choice for investors looking for strong earnings growth.
Axcelis Technologies (ACLS)
Axcelis Technologies (NASDAQ:ACLS) manufactures and designs essential equipment for the production of semiconductor chips worldwide. Yahoo! Finance reports five analysts predicting the stock to trade in a range from $130 to $180 per share. The average price is $157 per share.
Axcelis just announced its recent successful evaluation closure of a medium energy implanter for leading power device chipmakers in Japan. As demand for higher energy ion implant recipes grows, Axcelis will be able to expand its market share and product lineup to support numerous power device applications.
Moreover, Axcelis also boasts some impressive financial data at an undervalued price. Given its price-to-earnings (P/E) ratio of 14.16x versus its five-year average of 22.62x and the industry average of 34.31x, this stock sits at a significant discount. Additionally, solid YoY revenue growth of 22.89%, YoY EPS growth of 35.74%, and YoY EBITDA growth of 33.75% demonstrate the financial strength of the company. With Street analysts expecting a rebound in its true stock price, now is the best time to scoop up a few shares of this company poised for explosive future gains.
On the date of publication, Ian Hartana and Vayun Chugh did not hold (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.
