Is it Time to Bet on These 3 Unstoppable Growth Stocks Again?
06 Aprile 2022 - 4:50PM
Finscreener.org
A low interest rate environment
allowed growth companies access to cheap capital and fund their
expansion plans. However, in recent months, growth stocks have
grossly underperformed the broader market. In mid-March, the
tech-heavy NASDAQ Composite index was down 22% from all-time highs,
officially entering the bear market territory.
However, every pullback in the
past has been wiped away by a bull market rally, making most major
corrections a buying opportunity. Here, you can buy quality growth
stocks at a lower multiple. Let’s take a look at three such growth
stocks you need to buy right now.
PayPal
Down 62% from all-time
highs, PayPal (NASDAQ:
PYPL) is valued at a
market cap of $137 billion. The fintech giant ended 2021 with
a
total payment volume
of $1.25 trillion, an increase of
33% year over year. Now, PayPal expects TPV to surpass $1.5
trillion in 2022, which indicated a double-digit growth
rate.
Additionally, PayPal’s base of
426 million active users conducted 19.3 billion transactions, which
means each active account undertook 45.3 transactions in the last
four quarters. In 2020, the average payment transaction for each
account stood at 40.9.
So, in addition to expanding its
user base, PayPal has ensured existing users embrace its digital
payments platform over time. PayPal acquired buy now pay later
company, Paidy, for $2.7 billion last September. It will now offer
customers to finance purchases and expand its ecosystem in the
process.
Analysts tracking PayPal expect
sales to rise by 16% to $29.4 billion in 2022 and by 19.7% to $35
billion in 2023. Comparatively, its adjusted earnings to increase
at an annual rate of 17.3% in the next five years. PYPL stock is
valued at a forward price to sales multiple of 4x and a price to
earnings ratio of 25x which is very reasonable.
Meta Platforms
Shares of Meta
Platforms (NASDAQ:
FB) are down 40% from
record highs. Investors are worried about privacy changes to
Apple (NASDAQ: AAPL) devices
which should impact ad sales of digital advertising companies.
While privacy changes may impact the ability of advertisers to
reach their target audience, the digital marketing market continues
to expand rapidly.
Meta is inarguably the world’s
largest social media platform and ended 2021 with 3.6 billion
monthly active users, an increase of 9% year over year. Its sales
grew by 37% year over year to $118 billion while net income was up
35% at $39.4 billion. Comparatively, its free cash flow surged 67%
to $38.4 billion in 2021.
Meta can use its robust cash
flows to fuel its metaverse ambitions or even look to grow
aggressively via acquisitions. The company is valued at $631
billion by market cap and is trading at less than 5x forward sales.
In fact, FB stock is also valued at an attractive price to earnings
multiple of 18.7x.
Block
Formerly known as Square,
Block (NYSE:
SQ) changed its name to
reflect the company is now expanding into the blockchain business.
Block has already built an ecosystem of brands where it offers
small and medium enterprises access to tools such as invoicing,
cash flow management, and much more.
Block’s Cash App is a
peer-to-peer payments application that is gaining traction among
the underbanked communities. It offers users the ability to own
debit cards, as well as invest in stocks and
cryptocurrencies.
Block reported sales of $17.7
billion in 2021, an increase of 86% year over year. Comparatively,
its gross profits rose by 62% to $4.42 billion. The Cash App
reported gross profits of $2.07 billion, accounting for more than
40% of the gross margin.
SQ stock is valued at a forward
price to sales multiple of 4.3x and a price to earnings ratio of
100x, which is expensive. But its also trading at a discount of 45%
to consensus price target estimates.
Grafico Azioni Block (NYSE:SQ)
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Da Giu 2024 a Lug 2024
Grafico Azioni Block (NYSE:SQ)
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Da Lug 2023 a Lug 2024