With stocks reaching all-time highs as we round out the calendar year, all eyes are on the market. But which names are worthy of all this investor attention? Wall Street analysts recommend focusing on the long-term outlook in order to zero in on high-growth tickers. We mean the stocks best positioned to dish out huge returns in the years to come.
That being said, the economic uncertainty going into 2020 has made it increasingly difficult to pinpoint the names capable of leading the way. However, this is not to say that investment opportunities with stand-out growth prospects can’t be found.
We took advantage of the comprehensive investing tools from TipRanks.com to uncover 3 stocks that have what it takes to beat the market. Not to mention each of the stocks has racked up enough bullish ratings over the last three months to earn a “Strong Buy” consensus rating.
Let’s see why analysts view these stocks as buying propositions.
Anaplan offers a cloud-based planning platform to help organizations make better and more informed decisions. Thanks to its differentiated approach to cloud planning software, analysts have this stock pegged for further growth on top of its already impressive 80% year-to-date run.
PLAN has disrupted the industry with its patented technology. Its software uses hyperblock, or an in-memory database with a built-in calculation engine designed for enterprise-wide scalability. Based on its subscription rates, it’s clear that its customers are happy. We’re talking six quarters of 40%-plus subscription growth.
Piper Jaffray analyst Brent Bracelin reminds investors that the key takeaway here is that PLAN has been able to replace solutions from well-established names like Oracle (ORCL), IBM (IBM) and Microsoft (MSFT) within a $21 billion total available market. All of this lends itself to his conclusion that its steep valuation is warranted, adding that revenue could triple to reach $1.25 billion by 2024.
“The combination of high-growth prospects, a large market opportunity, strong leadership and differentiated technology help justify a premium valuation during a multi-year period of 40%-plus growth,” Bracelin commented. With this in mind, the five-star analyst remained bullish. Based on his $58 price target, shares could surge 21% over the next twelve months.
Looking at the consensus breakdown, the bulls have it. 12 Buy ratings and 4 Holds given in the last three months amount to a ‘Strong Buy’ Street consensus. In addition, the $62 average price target puts the upside potential above Bracelin’s forecast at 30%.
With one analyst telling investors that even after the consumer lender’s 81% year-to-date gain shares are undervalued, OneMain Holdings is definitely on our radar.
Piper Jaffray’s Kevin Barker points out that OMF shares are trading at 6x P/E despite its senior unsecured debt maturing in 5 years currently yields 3.68%, leverage is declining and the company is growing at a rate of 10%-plus. “We believe this valuation is over-discounting the cyclical nature of OMF's business and ignoring the improving fundamentals,” he explained.
When considering the impact of current expected credit loss (CECL) on OMF, the company has stated that it will build up its reserves. However, the new accounting standard shouldn’t hinder growth, with Barker claiming that CECL could actually be a net positive for OMF.
Adding to the good news, management has guided for faster loan growth than previously expected and investors could see a buyback in 2020. “We note the tangible leverage ratio ran at 6.1-6.8x throughout 2019 while targeting 5-7x. This would imply OMF is well capitalized and we continue to expect the company to initiate a $100M quarterly buyback in 1Q20,” Barker noted. To this end, the five-star analyst bumped up the price target by $3 to $51 along with his Buy rating. At this new target, the potential twelve-month gain lands at 22%.
With 100% Street support over the previous three months, the consensus is unanimous: OMF is a ‘Strong Buy’. Additionally, its $50 average price target suggests 19% upside potential.
Formerly known as Horizon Pharma PLC, the company is committed to developing therapies to improve the lives of people affected by rare and rheumatic diseases. With a strong product portfolio driving a solid Q3 performance, several members of the Street believe that HZNP’s growth story is just getting started.
Given its 51% year-to-date climb, it’s no wonder investors are excited about the pharmaceutical company. This attention has been further heightened following third quarter results that surpassed both the top and bottom-lines, led by the company’s Krystexxa drug for the treatment of gout. The drug’s sales were nothing short of stellar, $99.6 million or a 42% year-over-year increase to be exact. To top it all off, management gave its Krystexxa full year net sales growth forecast a boost.
These results played into Cowen & Co. analyst Ken Cacciatore’s assumption that “the orphan assets as a collection – led by Krystexxa – are setting a very strong, durable growth foundation”. He adds that HZNP’s teprotumumab program for the treatment of thyroid eye disease (TED) is a key area to watch. While there has been some concern regarding the scheduled AdCom ahead of the March 2020 PDUFA date for teprotumumab, the FDA agreed to allow HZNP to provide an expanded access program during the review period so that patients can begin treatment shortly.
“We believe that this allowance by the FDA is a very positive signal for not only the likelihood of approval, but also the nature of the disease,” Cacciatore commented. This prompted the analyst to not only maintain his bullish thesis but also raise the price target from $35 to $39. The updated target conveys his confidence in HZNP’s ability to jump 32% over the next twelve months. Like Cacciatore, the rest of the Street is betting on HZNP. As 7 Buy ratings have been received in the last three months compared to no Holds or Sells, the stock earns a ‘Strong Buy’ analyst consensus. Based on the $36 average price target, the upside potential comes in at 21%.
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