3 Monster growth stocks that can reach new heights
Out on Wall Street, things are always changing. Stock prices fluctuate, new players make their market debut, the macro environment shakes up and long-term trends change. That said, one thing remains the same: growth is the name of the game. Growth stocks consistently score a spot on investors̵
7; wish lists given their potential to deliver returns. This growth potential goes beyond the norm as these plays have already yielded some spectacular gains in 2020, with the upside set to continue to come in the long run. Knowing what you are looking for is one thing, but how should investors find these opportunities? One strategy is to take a signal from Wall Street professionals. With this in mind, we used TipRanks’ database during our search for exciting growth names, according to the analyst community. Locking in on three stocks that fit the bill, each analyst-backed ticker stands to chop more gains on top of their impressive year-to-date gains. Here are all the details. Sunnova Energy International (NOVA) First we have Sunnova Energy International, which is one of the largest providers of solar and energy storage services for homes. Although it has already risen 160% year to date, several analysts believe this name has more room to run. After speaking with NOVA founder and CEO John Berger, five-star analyst Joseph Osha of JMP Securities is even more confident in his long-term growth prospects, noting that “the stock appears to be significantly undervalued.” In particular, the storage company emphasizes, the analyst believes, that it is an important strength. “NOVA has been effective in driving warehouse speakers higher and has managed to make its dealer-focused business model work well. The demand environment for storage has been strengthened over the last 60 days, and we believe that we can be at a turning point for the industry, ”commented Osha. Looking more closely at associated rates, the figure landed at 34% in the second quarter. Part of this strong result was driven by the company’s relocation to the island markets, where Berger mentioned that the additional rates in Hawaii, Guam, Saipan and Puerto Rico are actually 100%. In addition, prices are improving in Texas and Florida. Osha elaborated on this, “Aggregation of all this gives a 34% number that Mr Berger believes will grow, albeit with very different dynamics in different markets. We also note that NOVA sells inventory to existing customers and that sales are not reflected in the stated connection speed. “Reflecting more positively, Osha says that NOVA’s relationship with Tesla and Generac sets it apart, as it also chooses the ideal dealer partners. What’s more, the overall stock market looks solid and cell manufacturers are struggling to keep up with demand. To that end, Berger argues that space is “as strong as you think it would be with affiliation rates continuing to rise in new geographies, and revenue per customer also growing.” While some investors have raised concerns about competition from Sunrun (RUN), Osha believes that while RUN’s approach works relatively well, the “smaller developers might lose” in the end. As a result, the analyst sees room for a larger valuation for NOVA. Consistent with his optimistic approach, Osha remained with the bulls, repeating a Market Outperform rating and a $ 43 target. Investors can get a 48% gain in their pocket if this goal is reached in the next twelve months. (To view Osha’s track record, click here) Do other analysts agree? They are. Only Buy ratings, 10 to be exact, have been issued in the last three months. Therefore, the message is clear: NOVA is a strong buy. Given the average price target of $ 33.70, stocks could rise 16% in the next year. (See Sunnova Energy International stock analysis on TipRanks) Big Lots (BIG) As a closeout retailer, Big Lots offers its customers everything from groceries and household items to furniture and electronics at an affordable price. With a solid status going into 2021, some members of the street believe that its 87% year-to-date gain is only the beginning. Five-star analyst Peter Keith represents Piper Sandler and tells clients that “the setup is very favorable going forward.” The company’s guidance for Q3 comps was above his estimate, but the $ 0.50- $ 0.70 EPS call (versus Keith’s $ 0.12 forecast) was a big surprise. “Not only has Q3 historically been a negative EPS quarter, but BIG is also driving huge EPS upward despite ~ $ 12 million in incremental rental expenses (on sales of DCs) and $ 10 million in COVID expenses,” he noted. Keith. To this end, the analyst bumped his Q4 comp estimate. Keith explained, “Q4 is getting pretty strong, the transition to discretionary closeouts could not be better timed, our research work continues to show an increased demand for home furniture and any positive impact from the new Chief Merchant (who took office at the end of July) has not yet affected the sales trend. “When it comes to closing activity, the new CMO Jack Pestello has helped strengthen BIG’s efforts in closing, where Keith has already noticed compelling offers under store control. In addition, the reduction in promotions should bode well for the retailer. BIG has reduced the number of promo days in half in the third quarter of 2020 compared to the third quarter of 2019. Although BIG is indicative of flat gross margins from year to year, Keith’s perception is therefore room for upward growth. On top of this, its storage position may be on time. According to management, most categories had some inventory constraints in the 3rd quarter, but suppliers are catching up with demand, particularly in key segments such as furniture, home office and small appliances. Adding to the good news, a $ 500 million share buyback permit was announced, which Keith claims will have to “add some juice to EPS in the coming quarters.” Everything BIG has done convinced Keith to maintain his overweight rating. In addition to the call, he left the $ 75 price target, suggesting 40% upward potential. (To see Keith’s track record, click here) When turning to the rest of the street, opinions are divided evenly. With 3 purchases and 3 teams awarded in the last three months, the word on the street is that BIG is a moderate purchase. At $ 60.33, the average price target implies 12% upward potential. (See Big Lots stock analysis on TipRanks) Amicus Therapeutics (FOLD) Last but not least, we have Amicus Therapeutics developing therapies for ultra-orphan diseases, including lysosomal storage disorders (LSDs). Up to 77% year to date, even more growth could be under pressure for this healthcare industry, say several Street professionals. Although it boasts a next-generation enzyme replacement therapy in Phase 3, one of its gene therapy assets has received considerable attention. During the CNSA conference, FOLD presented additional follow-up data from the Phase 1/2 CLN6 Batten gene therapy program. The program evaluates the AT-GTX-501, its gene therapy designed for use in CLN6 Batten disease, which is a fatal condition in which children experience a rapid and progressive decline in cognitive and motor function. It has a worldwide population of about 1,000 patients. The presentation included incremental temporary safety and efficacy data. Based on the safety data of 13 patients treated with the candidate, the therapy was well tolerated. It should be noted that five patients reported eleven grade 3 SAEs, including four that were considered potentially treatment-related. These included vomiting, fever and pain in the upper abdomen, which are symptoms often seen with the administration of AAV gene therapy. Weighing in on Cowen, five-star analyst Ritu Baral argues that immunogenicity to AAV9 or CLN6 was not observed is an important takeaway. In terms of efficacy data, the results for twelve patients who reached the 12-month time point and eight who reached the 24-month time point were analyzed against age-matched natural history. On the Hamburg Motor and Language (HM&L) Aggregate score, which assesses ambulation and speech, the average decrease in treated patients was much lower compared to the natural history in the same period. By digging a little deeper at the 12-month time point, the average decline in treated persons was 0.4 points versus 1.2 points in natural history subjects. At the 24-month time point, the mean regression rate was 0.6 points in treated subjects compared with 2.4 points in the natural history participants. What’s more, management stated that 63% of natural history patients experienced a further 2-point drop in HM & L scores two years after their first relapse, while only 13% of AT-GTX-501 gene therapy recipients experienced the same. What does all this mean? “We think this update is step by step positive and shows the durability of the AT-GTX-501’s efficiency for up to two years. Temporary efficacy results show nominally statistically significant and very likely clinically meaningful slowdown in disease progression over 24 months in CLN6 Battens … Baral. If that were not enough, the natural history control analysis could be sufficient for U.S. registration. “Given the rarity and severity of CLN6, we believe that a potential PBO-controlled trial is not possible. We believe that data on the natural history of the disease is rapidly solidifying into evidence that will be meaningful to both the FDA and the EMA, ”Baral explained. In view of all the above, Baral has high hopes. Along with an Outperform rating, she holds a price target of $ 31 on the stock. This target sets the upward potential at 81%. (To view Baral’s track record, click here) Other analysts appear to be repeating Baral’s sentiment. 3 Buy and no bracket or sale sells for a strong buy consensus assessment. Based on the average price target of $ 23.67, the potential comes up to 38%. (See Amicus Therapeutics stock analysis on TipRanks) Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended for informational purposes only. It is very important to do your own analysis before making an investment.