Investors can keep up with the stock market by investing in the S&P 500 and Nasdaq Composite. Some of the stocks on those indices have multi-trillion dollar valuations, while others aren’t far behind. You can find many stocks that trade below $50 per share, but most of them are penny stocks that don’t have bright futures.
This dynamic can cause some investors to feel as if they missed out on the rallies of stocks that are now well above $50 per share. Many publicly traded companies have amassed prices above $100 per share. However, investors can still find promising stocks under $50. Even though these stocks have relatively small prices, they look ready to rally and deliver long-term gains.
Every stock valued at $100+ per share started below $50. Investors should look for companies with rising revenue and net profit margins. These three stocks to buy under $50 check all of the boxes and look attractive at current levels.
Semrush (SEMR)
Semrush (NYSE:SEMR) is a popular search engine marketing tool that has a subscription business model. The stock hasn’t outperformed the stock market over the past five years, but it has delivered a 43% gain over the past year. Recent financial results suggest the stock is ready for a long-term rally.
The search engine marketing tool delivered 21% year-over-year (YOY) revenue growth in the first quarter. Annual recurring revenue currently stands at $354.2 million. The company has a vast pool of customers. Semrush’s paying customer base grew by 10% YOY and is closing in on 112,000 total customers. The company also has more than 1,125,000 registered free active customers. This figure is up by 27% YOY.
Semrush is attracting new customers while increasing the average revenue per customer. The firm saw a 32% YOY increase in the number of customers who pay more than $10,000 annually. Wall Street is optimistic about the stock’s long-term prospects. It’s rated as a Moderate Buy with a projected 14% upside.
Upwork (UPWK)
Upwork (NASDAQ:UPWK) is also a fan favorite among Wall Street analysts. It’s rated as a Moderate Buy with a projected 51% upside from current levels. The highest price target implies that the stock will more than double.
Although the stock hasn’t had the best year — it’s down by 22% so far this year — the company’s first-quarter results showed plenty of promise. Revenue increased by 19% YOY to reach $190.9 million, while net income jumped from $17.2 million to $18.4 million. The company also repurchased 5.2 million shares of its stock in the first quarter.
Upwork reported exceptional growth rates for its advertising and Freelancer Plus segments: 93% and 76%, respectively. More than 100,000 freelancers are subscribed to Freelancer Plus. Upwork trades at a 34 P/E ratio and is primed to capitalize on the growing freelancer economy. Tailwinds from the rising demand for remote work can translate into solid gains for long-term investors.
Palantir (PLTR)
Palantir (NYSE:PLTR) is an artificial intelligence stock that has been crushing the stock market. Shares are up by 69% year-to-date and have more than tripled over the past five years. The big data company reported solid growth numbers in the first quarter. Revenue increased by 21% YOY, while net income surged by 528% YOY.
The company has made plenty of revenue from government contracts over the years, but U.S. commercial revenue is starting to soar. Palantir’s $150 million in U.S. commercial revenue represented close to 25% of total revenue. This segment grew by 40% YOY and was up by 14% sequentially.
Palantir’s total customer base increased by 42% YOY. This diversified customer base will help Palantir maintain high revenue numbers and generate solid growth rates. Palantir issued upbeat guidance. Q2 2024 revenue is expected to range from $649 to $653 million. The company also raised full-year guidance to between $2.677 and $2.689 billion.
On the date of publication, Marc Guberti 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
