Growth stocks have had a stellar run so far this year, and that trend is likely to continue in December and beyond, as progress made by these companies have made analysts highly optimistic about their revenue and earnings prospects.
The outperformance of the growth stocks is evident from the SPDR Portfolio S&P 500 Growth ETF’s (SPYG) 28.4% return so far this year, versus the broader S&P 500 index’s 13.5% gain.
The growth space is dominated by technology companies that are innovating quickly to keep up with changing consumer needs. These companies have witnessed a surge in the demand for their products and services under the “new-normal.” So, investors could see continued outsized returns in the future.
Stocks like Apple, Inc. (AAPL), NVIDIA Corporation (NVDA), Pinterest, Inc. (PINS), and Roku, Inc. (ROKU) are established players in the technology space, and have a lot of room to run. These companies not only have a proven track record, but they are constantly upgrading their offerings to remain in demand.
Apple, Inc. (AAPL)
AAPL needs no introduction. It has operations worldwide and is one of the largest companies globally. AAPL’s stock has gained 67.5% so far this year.
AAPL recently launched the latest instalment to its iPhone series of smartphones. The iPhone 12 Pro Max and the iPhone 12 Mini have been distributed to stores worldwide. The company has also launched a new operating system for its Mac users called MacOS Big Sur.
AAPL’s revenue has grown at a three-year CAGR of 6.2%. The company’s EBITDA has grown at a CAGR of 2.6% over the same period. AAPL’s revenue is expected to grow 15.3% for the quarter ending December 2020, and 14.8% in 2021. The company’s EPS is expected to grow 11.2% during the current quarter and 12.64% per annum over the next five years.
How does AAPL stack up for the POWR Ratings?
A for Trade Grade
B for Buy & Hold Grade
B for Industry Rank
B for Overall POWR Rating
The stock is also ranked #9 out of 30 stocks in the Technology – Hardware industry.
NVIDIA Corporation (NVDA)
NVDA is one of the world’s leading computer graphics chips manufacturers. The company primarily operates in the gaming, enterprise, high-performance computing, and automotive segments. NVDA’s stock has risen 127.7% so far this year.
In preparation for the holiday season, the company has recently launched the GeForce RTX 3060, which is the latest installment in its line of highly popular GPUs. The company has also started an NVIDIA Healthcare Alliance, which is aimed at helping startups collaborate with NVDA to develop AI for medical purposes. This move could be a gamechanger for the medical industry.
NVDA has recorded revenue growth (CAGR) of 18.1% over the last three years. The company’s EBITDA has gained at a CAGR of 18.7% during the same period. The company is expected to see revenue growth of 55% for the quarter ending January 2021 and 51% in 2021. The company’s EPS is expected to rise 48.1% for the quarter ending January 2021 and 21.5% per year over the next five years.
NVDA’s strong fundamentals are reflected in its POWR Ratings. It has a “Buy” rating with an “A” for Trade Grade and Industry Rank. It is ranked #86 out of 45 stocks in the Semiconductor & Wireless Chip industry.
Pinterest, Inc. (PINS)
PINS is a social media company that operates an image-sharing website. The company’s platform allows users to create and manage pinboard style collections of images. PINS’s stock has gained 274% so far this year.
The company recently crossed the 400 million monthly active users mark. PINS has also launched several new tools which will allow merchants to feature, curate, and measure their products on the platform. This move is expected to help the sale of goods through Pinterest.
The company’s revenue is expected to rise 60.7% for the quarter ending December 2020, and 41.5% in 2021. The company’s EPS is expected to grow 166.7% for the quarter, and 152.3% per annum over the next five years.
It’s no surprise that PINS has a “Strong Buy” in our POWR Ratings systems with a grade of “A” in Trade Grade, Buy & Hold Grade, Peer Grade, and Industry Rank.
Roku, Inc. (ROKU)
ROKU develops, manufactures, and markets streaming devices for use with television sets. The company also provides software developer kits that allow users to create content and stream it through the platform. ROKU’s stock has risen 115.9% so far this year.
The company recently launched the Roku Streambar in the UK. This move is part of the company’s efforts to expand into new markets. The company has also made the RTE Player on the Roku platform available in Ireland.
The company’s revenue has grown at a CAGR of 48.3% over the last three years. ROKU’s revenue is estimated to rise 46.1% for the quarter ending December, 2020, and 37.8% in 2021. The company’s EPS is expected to grow 30.8% during the current quarter and 28.6% in 2021.
ROKU’s strong fundamentals are reflected in its POWR Ratings. It has a “Strong Buy” rating with an “A” for Trade Grade, Buy & Hold Grade, and Peer Grade. It is ranked #3 out of 30 stocks in the Technology – Hardware industry.
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AAPL shares were trading at $122.04 per share on Friday afternoon, down $0.90 (-0.73%). Year-to-date, AAPL has gained 67.45%, versus a 16.27% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaryaman Aashind
Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks. More...
More Resources for the Stocks in this Article
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|NVDA||Get Rating||Get Rating||Get Rating|
|PINS||Get Rating||Get Rating||Get Rating|
|ROKU||Get Rating||Get Rating||Get Rating|