TipRanks
3 Monster Growth Stocks That Are Still Undervalued
A lackluster jobs report didn’t derail the markets last week. New jobs in April totaled only 266,000, far below the 978K expected, and the official unemployment rate, which had been predicted to come in at 5.8% actually ticked up slightly to 6.1%. Even so, the tech-weighted NASDAQ gained 0.88% in Friday’s session, the broader S&P 500 was up 0.75% at the end of the day. These gains brought the S&P to a new record level, with a year-to-date gain of 13%. The market’s growth so far this year has been broad-based, based as it is on a general economic reopening as the corona panic shrinks in the rear-view mirror. Broad-based market gains create a positive environment for growth stocks. Using the TipRanks database, we’ve pulled up three stocks that fit a profile: a Buy rating from Wall Street, recent share appreciation that strongly outperforms the overall markets, and considerable upside potential, indicating that they may still be undervalued. Here are the details. Crocs (CROX) We’ll start in footwear, where Crocs took the world by storm almost 20 years ago, when it first started selling its signature brand of foam clogs. The shoes were big, bright, and even tacky – but they caught on and succeeded, and the company has since branched out into more traditional footwear, including sandals, sneakers, and even dress shoes. The brand has grown popular with teens, who see it as an ‘ugly chic’ and retro – but have boosted sales. And boosted sales are what the game is all about. The company’s quarterly revenues hit their recent trough in the fourth quarter of 2019, and since then have recorded 5 consecutive quarter-over-quarter revenue gains, with last three also being year-over-year gains. The most recent quarterly reports, released last month for 1Q21, showed $460.1 million on the top line, a company record, and a 63% year-over-year gain. EPS, at $1.47, was down from Q4’s $2.69 – but up more than 800% from the 16 cents recorded in the year-ago quarter. That gain helped cap a year in which CROX shares have appreciated an impressive 374%, and are still trending upwards. Crocs’ overperformance has caught the eye of Piper Sandler analyst Erinn Murphy, who is ranked in the top 10% of Wall Street’s stock pros. “We applaud the Crocs’ team for their continued execution, disciplined inventory management & account management and underlying reinvestments in the brand health. Too, with strong visibility into Q2 (sales forecast +60% to 70%) and 2H estimates moving up handily with solid orderbook plans to boot, we believe bears worried about the sustainability of the brand momentum will need to hibernate for another 12 months,” Murphy noted. To this end, Murphy gives CROX an Overweight (i.e. Buy) rating, and her $140 price target suggests it has a ~29% upside in the next 12…
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