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3 monster growth stocks that are still undervalued
What is always in style on Wall Street? Increase. However, given the current macroeconomic environment, compelling growth stocks have become even more difficult to spot. That said, despite the wild ride 2020 has taken, a select few names might still be able to shine and reward investors handsomely, street professionals say. These tickers do not have old growth prospects, they are some of those that greatly outperform. Coupled with a history of bullish movements since 2020 kicked off, their strong business could drive stock prices higher into 2020 and beyond. With this in mind, we set out to find stocks flagged as exciting growth plays by Wall Street. Using the TipRanks database, we zeroed in on three analyst-backed names that have already made impressive returns and have strong long-term growth narratives. Wix.com Ltd (WIX) Founded as an online web development platform, Wix enables its more than 72 million registered users to develop and create websites. With a 107% increase so far this year, several members of The Street believe that this name has a lot of fuel left in its tank. Writing for JMP Securities, five-star analyst Ronald Josey has been impressed, to say the least. In the most recent quarter, the company added 9.3 million net registered users, the most in a quarter, driven by its higher marketing spend to take advantage of the digital shift brought on by the COVID-19 pandemic. What’s more, Josey cites the fact that July’s new subscriber additions accelerated to over 200% as suggesting that the previous trend continues to accelerate. However, he argues that the most important growth indicator is future cohort collections, which increased more than 90%, as it “speaks to a high growth rate of new subscriber additions in the second quarter of Wix, and how the Q2 trends continue into Q3, we think this bodes well for 2021 and beyond (we noted Q2 cohort collections were 66% year over year). ” In addition to the good news, the number of customers adopting higher-value products, such as e-commerce and business subscription packages, is increasing. Payment transactions nearly doubled from quarter to quarter, which Josey believes speaks “of the adoption of Wix ecommerce products while highlighting Wix’s long-term payment opportunity.” Josey added, “With the trends accelerating around adoption of core Wix products like Stores (which was recently updated), Ascend and Payments, along with more recent product offerings like Editor X (not in the guide) , we are increasingly confident in Wix’s ability to navigate the current environment and the potential to enhance collections growth for the foreseeable future. ”Taking all of the above into consideration, Josey maintains a Market Outperform rating and price target. of $ 363. This target conveys his confidence in WIX’s ability to go up 43% more in the next year. (To view Josey’s track record, click here) What is the position of other analysts at Wix? issued 14 purchases and 1 hold in the last three months. Therefore, WIX earns a consensus rating of Strong Buy. Given the average price target of $ 333.93, the stock could rise 32% next year. (See Ana Wix stock listing on TipRanks) Bilibili Inc. (BILI) Next up, we have Bilibili, which is a Shanghai-based Chinese video-sharing website focused on animation, comics and games (ACG). It has already posted a 124% gain so far this year, and some analysts believe this growth story is not over. JP Morgan’s five-star analyst Alex Yao tells clients he is “incrementally positive on BILI’s growth prospects.” But what is behind your bullish thesis? Yao noted, “Management’s comment that the maximum MAU reached the 200 million milestone in August 2020 makes us more positive about BILI’s long-term user growth beyond Gen-Z. We expect further user growth in Q4 2020 with the support of League of Legend (LoL) world championship season 10 (in September / October 2020, BILI is one of the key streaming platforms). ” this end, the analyst estimates that MAU will exceed 400 million by 2023. In addition to this, BILI experienced strong growth in advertising revenue in the second quarter, with an increase of 108% year-on-year. According to Yao, this result “demonstrates its strong attraction to advertisers driven by its rich content and growing user base, “and the analyst expects its strong execution in both user expansion and revenue diversification to increase its long-term addressable market. Going forward, The company will most likely continue to invest in branding and channel marketing to support user growth during strong seasonality. By exposing the implications of this o, Yao stated, “While such investment could expand financial losses in the short term, we believe it could help BILI accelerate user expansion and support long-term monetization growth, as all revenue drivers from BILI (game, ads, subscription, etc.) are directly linked to the growth of users “. As a result, the analyst sees higher user growth as an important potential catalyst. The launch of new mobile games, as well as the acceleration of content provider Huahuo’s advertising platform, which helps content providers connect with brand-name advertisers, could also generate a significant boost, according to Yao. In keeping with his optimistic approach, Yao stayed with the bulls. Along with an Overweight rating, it maintains a $ 55 price target on the stock. Investors could pocket a 32% profit if this goal is reached in the next twelve months. (To see Yao’s history, click here) Going back to the rest of the Street, bulls make up the majority. With 4 purchases and 2 reservations allocated in the last three months, BILI is said to be a moderate purchase. At $ 53.43, the median price target implies a potential upside of 28%. (See Bilibili stock analysis on TipRanks) MercadoLibre (MELI) Last but not least, we have MercadoLibre, one of the largest e-commerce companies in Latin America. Given its growing market share, Wall Street believes this name could make even more profit on top of its 89% increase so far this year. After arranging a meeting with members of the MELI management team, Stephen Ju from Credit Suisse is even more confident in his long-term growth prospects. It should be noted that MELI expanded its category tap rates to Chile and Mexico in the second quarter of 2020, with Brazil and Argentina set for 2H20 or early 2021. Ju notes that streamlining the resulting tap rate could lead to Sellers will price more of their inventory and lower prices. With this increased supply, he argues, “MELI should see the cascading benefits of a better shopping experience and increased conversion rates.” Additionally, in the prior quarter, there was a 23% sequential decrease in unit shipping costs. The combination of Flex and MELI Logistics, which integrates with microcarriers through a software layer, has also improved. Considering this, Ju commented: “His efforts to intensify the development of his own logistics network to end the dependence on Correios in Brazil are producing these tangible results and also position the company to potentially underwrite a greater amount of free shipping subsidies to as the unit cost of deliveries continues to decline … All of this together means greater reliability, faster shipping times, and greater cost savings, which can be passed on to the consumer. “In the future, MELI is expected to invest in the Consumer Electronics and CPG categories to fill selection gaps and improve price competitiveness. Ju says its expanded logistics footprint could allow the company to capitalize on this opportunity, and then tackle the grocery market. enough, despite COVID-related headwinds, MELI has sold approximately 1 million mobile devices Point of Sale (mPOS) s, up from 900,000 during Q1 2020, driven mainly by smaller merchants and SMEs As the economy continues to reopen, POS per device should also increase, in Ju’s view. The analyst added: “Also with ~ 20 million Payors not yet Active Buyers on the Marketplace, there is a cross-sell / upsell opportunity beyond that of existing fintech products such as QR codes, credit / debit cards. MELI Brand, Consumer Credit and Asset Management / Fundo. “In addition, Ju believes that increased consumer recognition through brand advertising, particularly in Brazil and Mexico, could help drive momentum. that MELI has going for it convinced Ju to reiterate its Outperform rating. Along with the call, it set a price target of $ 1,484, suggesting a 37% upside potential. (To view Ju’s history, click here) Overall, other analysts echo Ju sentiment. 9 buys and 2 holds add up to a consensus rating of Strong Buy. With an average price target of $ 1322.73, upside potential is 23%. (See analysis d e shares of MercadoLibre in TipRanks) Disclaimer: The opinions expressed in this article are solely those of prominent analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
