Growth investors are often focused on finding companies whose earnings and revenue are expected to outpace the market. This investment strategy comes with its share of risks. Yet, it also brings the exciting possibility of outsized returns.
For years, many of Wall Street’s most exciting growth stocks have emerged from the technology sector. Recent examples include everyone from Netflix NFLX and Facebook FB to Nvidia NVDA and other chip stocks. Despite some volatility, strong earnings and impressive sales remain the story for many companies in the technology sector.
With that said, let’s pair the proven Zacks Rank with our Style Scores system. This system includes a “Growth” category that helps us find tech stocks poised for solid growth. Investors should note that our Growth category values earnings and sales growth, as well as improvements to a company’s financial statements, including strong cash flows and solid return on equity.
Now it’s time to check out three tech stocks that came through our screen today that growth investors might want to consider at the moment:
1. Square SQ
Square, which is run by Twitter TWTR CEO Jack Dorsey, is a fintech firm that has expanded from a credit card processor for the mobile age, into a more complete financial services firm, offering business loans, peer-to-peer payment options, debit cards, and more. SQ has become more attractive to larger clients and its P2P payment platform, the Cash App, stands out against rival offerings from PayPal PYPL and even JP Morgan JPM. Meanwhile, the company’s newer in-app payments SDK looks poised to become more attractive to clients as mobile shopping and ordering become the norm.
Our current Zacks Consensus Estimate calls for the firm’s adjusted Q1 fiscal 2019 earnings to surge 33.3% on the back of 40% revenue growth. More impressively, SQ’s full-year EPS figure is projected to soar over 57% on nearly 34% revenue growth. Plus, Square’s fiscal 2020 revenue is expected to come in roughly 30% above our $4.41 billion estimate for 2019 to touch $5.71 billion, with earnings projected to jump 52% higher. Square is Zack Ranks #2 (Buy) at the moment, based on its recent positive earnings estimate revision activity. SQ also rocks “A” grades for both Growth and Momentum in our Style Scores system and has seen its stock price surge 32% this year. Despite the climb, Square shares rest 27% below their 52-week high, which gives them plenty of room to run.
2. Digital Turbine, Inc. APPS
Right off the bat, investors should note that Digital Turbine trades for under $5 a share, which makes it inherently volatile. Digital Turbine operates a business that aims to connect OEMs, mobile operators, and publishers with advertisers and app developers. For example, APPS’ geo-targeted preloads helped soon-to-be-public ride-sharing platform Lyft add more than 1.9 million customers. Digital Turbine looks ready to attract more clients as mobile devices become more ubiquitous around the world. On top of that, the firm’s longer-term earnings revision activity helps it earn a Ranks Rank #1 (Strong Buy) right now.
Digital Turbine has seen its stock price skyrocket nearly 80% in 2019. The Austin, Texas-based company also sports an “A” grade for Growth and is expected to swing from an adjusted loss of $0.01 per share to post earnings of $0.02 a share in the current quarter, for a 300% expansion. Digital Turbine’s revenue is also expected to surge approximately 26% in each of the next two quarters. Furthermore, the firm’s full-year EPS figure is projected to soar 240%, with 67% growth projected in the following year.
3. Intuit Inc. INTU
Shares of Intuit have surged over 47% in the last 12 months, including a 30% climb to start the year, to help blow away the Computer-Software-Services Market’s 9% average. INTU’s strong 2019 has seen the stock hit new highs throughout the year and currently rests just below its 52-week high of $260.71 per share. Intuit offers a variety of financial services geared toward taxes, small business money management, and personal finance. Intuit’s software-as-a-service products include QuickBooks and TurboTax and boast a total of roughly 50 million customers around the world. Going forward, Intuit’s SaaS model and cloud focus look poised to attract more clients and customers as both of these industries continue to boom.
Our current Zacks Consensus Estimate calls for INTU’s adjusted Q3 fiscal 2019 earnings to jump 11.6% to reach $5.38 per share on the back of 10.3% revenue growth. This growth is expected to continue for the full year, with its EPS figure projected to jump 16.7% on 11.5% higher revenue. Double-digit top and bottom-line growth is projected in the upcoming year as well. Intuit has also experienced a ton of positive earnings estimate revision activity recently, with most of the upward revisions coming for fiscal 2019 and 2020. Intuit is a Zacks Rank #2 (Buy), with an “A” grade for Growth in our Style Scores system. Along with its growth prospects and impressive climb, Intuit is a dividend payer that recently raised its quarterly payout by 21%.
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JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
Facebook, Inc. (FB) : Free Stock Analysis Report
Twitter, Inc. (TWTR) : Free Stock Analysis Report
Square, Inc. (SQ) : Free Stock Analysis Report
PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
Digital Turbine, Inc. (APPS) : Free Stock Analysis Report
Intuit Inc. (INTU) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
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