3 Comeback Stocks Set to Reclaim Their Crown

  • Focus on growth, efficiency, and customer engagement drives the resurgence of these comeback stocks.
  • PayPal (PYPL): Non-GAAP EPS grew aggressively, showcasing robust profitability and strategic decision-making.
  • Warner Bros. Discovery (WBD): Global ARPU increased, with a focus on personalized content and efficient ad-break optimization.
  • Starbucks (SBUX): Starbucks Rewards saw a high increase in 90-day active members, indicating effective customer retention strategies.
Comeback Stocks - 3 Comeback Stocks Set to Reclaim Their Crown

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Spotting comeback stocks is important since they frequently indicate underlying strength and the prospect of large returns. Fundamentally, these stocks can rise from their current lows to all-time highs. They can overcome adversity and advance with strong business models, strategic flexibility, and operational efficiency, which may promote long-term growth. Here is an exploration of the unique qualities of these top three comeback stocks that set them apart in their respective fields.

These companies share several fundamentals that might help their stocks recover toward new highs. For instance, strong EPS growth, user engagement, and transaction frequency highlight their stability and importance in the market. Similarly, prolonged profitability is critical in the long run to support the strategic content pipeline, engagement optimization, and cost efficiencies.

Further, a robust customer loyalty program, income diversification, and operational enhancements demonstrate adaptability and inventiveness. These components, taken together, show why these stocks are poised to retake their dominance in the cutthroat market.

PayPal (PYPL)

Closeup of the PayPal app icon seen on a Google Pixel smartphone. PayPal Holdings, Inc. (PYPL) is a global financial technology company operating an online payment system.
Source: Tada Images / Shutterstock.com

PayPal (NASDAQ:PYPL), a leading online payments company, demonstrates a robust financial position with solid EPS, increased user engagement, and a growing transaction volume. In Q1 2024, the company’s Non-GAAP EPS exceeded expectations, surging a significant 27% year-over-year (YOY) to $1.08. With 220 million monthly active accounts in Q1 and 427 million overall active accounts, PayPal maintains a solid user base. Despite a slight YOY decline in active accounts, a 0.4% consecutive increase suggests steady user engagement and potential for further expansion.

Additionally, PayPal focuses on improving user experience and client retention based on its emphasis on strengthening relationships and encouraging engagement throughout its customer base. The number of transactions per active account rose to 60 in 2018 from 43 in the previous year, a sign of greater user involvement and use of PayPal’s services. This measure highlights PayPal’s significance in users’ everyday lives and the possibility for more revenue collection through transaction fees by showing a rising reliance on the service for financial transactions.

Overall, these elements highlight PayPal’s sharp financial standing and continued market relevance, making it a strong contender for the comeback stocks list. 

Warner Bros. Discovery (WBD)

The logo of the new Warner Bros Discovery (WBD) company on smartphone screen.
Source: Jimmy Tudeschi / Shutterstock.com

Warner Bros. Discovery (NASDAQ:WBD), a key player in the entertainment sector,  is making significant strides in increasing user engagement, reducing costs, and implementing smart content pipelines. In Q1 2024, the company saw a 4% YOY increase in the global average revenue per user (ARPU), primarily driven by a larger mix shift of lower ARPU overseas users relative to US subscribers. US ARPU also rose by a robust 8% YOY in Q1, indicating effective monetization strategies. The company’s focus on content quality and diversity is evident in the all-time high interaction in Q1, which bodes well for its market relevance and future growth.

Moreover, Warner Bros. Discovery boosts the user experience and maximizes top-line potency by utilizing AI and machine learning for sharp ad-break optimization and targeted content discovery. Since 2024’s beginning, Warner Bros. Discovery has brought in over $1.8 billion worldwide at the box office, with the likes of Godzilla x Kong and Dune: Part Two generating over $1.2 billion.

Finally, through its intellectual property (IP), the company offers a plethora of potential for content growth and revenue generation. These include popular brands like DC Comics and Harry Potter. Because of these fundamentals, Warner Bros. Discovery scores highly on the comeback stocks list.

Starbucks (SBUX)

Learnin' From Luckin, Starbucks Stock Heats Up a Strategy
Source: monticello / Shutterstock.com

Starbucks (NASDAQ:SBUX) is a global coffeehouse chain. Its Rewards loyalty program experienced a 6% increase YOY in 90-day active members in the US, totaling 32.8 million members. The growing membership base provides Starbucks with a substantial customer data pool for targeted marketing initiatives and personalized promotions, enhancing customer engagement and driving sales. Despite facing challenges in comparable store sales, Starbucks maintains revenue stability through diversified product offerings.

Further, introducing new products like the Lavender platform, Spicy Refreshers, and Reserve Hot Honey beverages highlights Starbucks’ commitment to innovation. These products drive revenue and contribute to brand differentiation and customer loyalty. Starbucks enhances operational efficiency to meet customer demand and improve overall service quality. For instance, initiatives like the siren craft system and investments in technology aim to optimize store operations and streamline customer experiences.

To sum up, PayPal boasts a strong customer loyalty program, diversified revenue streams, and continual operational improvements, which make it one of the top picks for comeback stocks.

As of this writing, Yiannis Zourmpanos held long positions in PYPL, WBD and SBUX. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.


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