3 growth stocks to buy put the fist back now
Investors are very concerned that the stock market could suffer a correction as we approach September, after what has been a foamy year for the market. This could cause many investors to take a portion of their earnings and accumulate money. But if you have the money that you are looking to invest now, fear not, because there are always corners of the market where winners are just waiting to be found.
That said, we have assembled a panel of Motley Fool contributors who have identified three stocks in which they see huge opportunity: Point correction (NASDAQ: SFIX), Gannet (NYSE: GCI), and Airbnb (NASDAQ: ABNB). Read on to see why they think these three companies could win big.
Don’t count Stitch Fix yet
Nicolas rossolillo (Fixed point): Stitch Fix was mostly down in 2021, but it certainly hasn’t come out. Caught in the liquidation of growth stocks last spring, he then lowered sales expectations for the full year and underwent a transition from CEO from founder Katrina Lake to CEO Elizabeth Spalding. Stitch Fix stock is down 34% so far in 2021 on various shreds of potentially worrying news. Compared to the same period a year ago, however, stocks are up 47% more than respectable.
As of this writing, Stitch Fix is valued at just 2.1x 12-month sales – a glaring long-term value if this cutting-edge clothing and accessories company can maintain its momentum. In the first nine months of its 2021 fiscal year (the nine months ended May 1, 2021), sales increased 21% from the same period last year to $ 1.53 billion. The company expects to record at least a 22% growth rate in its final quarter of fiscal 2021, as it wraps up last summer’s period of declining sales (when retail clothing was down in the first few months of the pandemic).
Certainly, many investors might be inclined to forgo Stitch Fix because it is not yet profitable. The net loss was just over $ 30 million in the first nine months of the year. However, this is largely on purpose, as Stitch Fix markets itself as a growth stock and funnels excess cash into marketing and research and development spending. Speaking of research, Stitch Fix’s AI-based algorithms have reportedly caught fire from some of the company’s stylists, with some claiming they were in competition with the software as Stitch Fix gives customers more options. to choose from sets organized by technology.
This is, of course, yet another situation worth watching; disgruntled employees could affect the relationship Stitch Fix has with paying customers if the AI company can’t deliver the right products. But Stitch Fix is nonetheless working hard to improve their service and help develop a new way to buy new yarns on the Internet. After the beating she suffered this year, stocks appear too cheap to ignore before the fourth quarter of fiscal 2021 results update on September 21.
There is life in this newspaper business
Bram berkowitz (Gannet: radar. In 2019, Gannett completed its merger with New Media Investment Group to become the country’s largest newspaper publisher. They own some of the biggest newspaper brands including United States today, Indianapolis Star, The Monks Register, and much more.
Initially, the deal was canceled as the printing industry had been struggling for many years and investors weren’t too keen on seeing Gannett take out a large $ 1.8 billion term loan. dollars to complete the deal. Gannett’s stock fell below $ 1 at one point in 2020. But the company has started to rally and is now trading around $ 6.30 per share. Since last year, the company has been able to refinance and repay some of its debt, and now finds itself with just under $ 1.5 billion in outstanding debt.
The company has also evolved its business model to rely less on print revenue and more on digital subscribers and new revenue streams. In June, the company had nearly 1.4 million digital subscribers, up 41% year-on-year. Management has set a target of growing to 10 million digital subscribers over the next five years. To give a bit of context, The New York Times currently has 7 million digital subscribers. Gannett also has a growing event business, is exploring non-fungible tokens, and recently launched a new premium sports subscription product, so rest assured this is not a business that is going to depend on print revenue.
The company’s projected profit before interest, taxes, depreciation, and amortization (EBITDA) in 2021 is nearly $ 477 million, while it has a current enterprise value (EV) of nearly $ 2.1 billion. dollars, which gives it an EV / EBITDA value of about 4.34. Projected revenue in 2021 is close to $ 3.3 billion and the company’s current market cap is around $ 900 million, so if things are going well, this would be a great time to to buy.
Book a journey to growth with this industry leader
Keith Noonan (Airbnb): Despite recent gains, Airbnb stock is still trading down around 25.5% from its highest living standard. Investors shouldn’t be deterred by the relatively subdued performance of the vacation rental specialist’s short history as a publicly traded company. Airbnb stock looks quite appealing when viewed against the backdrop of the strong performance the company has achieved since its inception in the market.
The travel industry innovator has always faced the challenges created by the coronavirus pandemic, but it has also become a leaner and more efficient company in response to these headwinds; and he has managed to achieve encouraging results despite the enormous challenges ahead. There is also a very powerful network effect at play here.
More than 4 million hosts around the world already use the company’s platform, with more joining every day. As more hosts join the platform, guests will have more accommodations to choose from. This new level of variety should help attract more users to the platform, which in turn will encourage more people to join as hosts.
Airbnb’s business model is already a proven success and it looks very scalable from here on out. The company is also entering the experience services category – offering travelers the option to book reservations for local events. With the ability to match accommodation and event tickets, Airbnb has a new and booming growth opportunity that should help drive up average spend per booking and overall margins.
With the company boasting a market capitalization of around $ 104 billion and trading at around 18 times the expected sales this year, it’s clear that healthy growth is already built into Airbnb’s valuation. However, the company has an incredible avenue for further expansion and looks poised to deliver strong earnings growth. I think patient investors should see a fantastic performance from the stock.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.