The 7 Most Undervalued Cathie Wood Stocks to Buy in September 2023
Pursuing undervalued Cathie Wood stocks radiates a magnetic allure for investors aiming for a hefty financial breakthrough.
The stocks favored by Wood are risky but grounded in foresight, offering tremendous long-term upside potential. She has effectively navigated the volatile waves of SPAC-mania and the burgeoning retail investor sphere with a discerning eye.
Wood’s ARK ETF series blossomed during the bull run in 2021, benefiting growth-oriented entities. However, her picks haven’t been immune to the market’s fickleness.
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Yet, discerning eyes would spot golden nuggets among these undervalued Cathie Wood stocks brimming with potential.
Block (SQ)
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Block (NASDAQ:SQ) is renowned for bolstering small to medium-sized businesses in the U.S.
Its second-quarter results showed a robust 26% surge in sales, reaching a remarkable $5.5 billion. Its Cash App stole the limelight with a whopping $3.6 billion in sales, whereas the Square ecosystem made notable contributions, pulling in a whopping $1.9 billion.
However, its shares took a slight dip post-announcement as the firm’s gross payment volume (GPV) didn’t quite hit the mark, with management hinting at a deceleration in gross profit growth rate.
Block remains committed to its vision of optimizing operations for enhanced profitability and steering investments toward pivotal growth vectors.
Its stock is down by double-digit margins year-to-date, offering an attractive entry point for long-term investors, which makes it one of the undervalued Cathie Wood stocks to buy on the dip.
Teradyne (TER)
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Teradyne’s (NASDAQ:TER) offerings are quintessential to the semiconductor market’s operations.
The company specializes in automated test equipment and crafts vital technologies for robotics and AI-driven chip production. Its expertise in instrument manufacturing for electric measurements adds to its allure.
Financially speaking, Teradyne shines with a robust balance sheet, standing tall with an impressive track record of profitability. This financial prowess hasn’t gone unnoticed, with GuruFocus awarding it a high 9 out of 10 ranking in terms of profitability, growth, and financial strength.
However, TER stock has encountered some difficulties, mainly because of hiccups in the memory and smartphone sectors.
Yet, seeing the broader picture with the recent slump, a mere blip is crucial. Second-quarter results surpassed expectations, powered by the auto and industrial sectors. Add to that the growing demand for high-performance computing linked to AI, and the future looks promising.
Roblox (RBLX)
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Regarding immersive virtual experiences, Roblox (NYSE:RBLX) isn’t just a name; it’s an industry titan.
Financial snapshots of its second-quarter highlight its momentum, boasting revenues of $680.8 million, up 15% year-over-year. Bookings also soared by a remarkable 22%, touching $780.7 million. While the net loss sits at $282.8 million, an expanding user base, with a 25% spike in daily active users to 65.5 million, is a testament to the brand’s allure.
Key metrics unveil nuanced stories with a commendable 19% year-over-year surge in unique monthly payers. With a multifaceted appeal spanning age groups, Roblox’s commitment to safety, voice and facial animation innovation, and its robust developer ecosystem make it more than just a gaming platform.
With its unique blend of immersive advertising and AI-driven innovation, the company isn’t just playing games; it’s setting benchmarks in the tech world.
PagerDuty (PD)
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PagerDuty (NYSE:PD) stands out as a leader in the realm of digital operations management.
Cloud-based subscriptions drive its primary revenue generation, with a substantial sales chunk attributable to mid-market and enterprise clientele. Boasting an expansive total addressable market of $38 billion, PagerDuty’s long-term growth trajectory is incredibly enticing.
Second-quarter results for PagerDuty gleamed with optimism. The company posted a Non-GAAP earnings-per-share of 19 cents, beating estimates by eight cents. Revenues clocked in at $107.6 million, a commendable 19.2% year-over-year jump, beating analyst estimates by $2.7 million.
Annual recurring revenue witnessed a 17% uptick at $431 million. Its client base shelling out over $100,000 in annual recurring revenue saw a 12% growth.
With impressive gross margins soaring above 80%, there are superb prospects ahead for the firm in improving its profitability as it scales. PagerDuty isn’t just about powerful numbers but a resilient and evolving stance in a competitive market.
Ginkgo Bioworks (DNA)
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Ginkgo Bioworks (NYSE:DNA) is not just another name in synthetic biology; it’s a symbol of innovation.
Unlike traditional biotech paths, Ginkgo plays a pivotal role in the conceptualization phase in the development of biotech products. When a company envisions a biotech product, Ginkgo crafts the perfect microorganism for efficient production, selling it for an upfront fee upfront fee, coupled with future royalties.
Though the journey to push companies toward its services has been gradual, recent partnerships with giants such as Novo Nordisk (NYSE:NVO) and Sumitomo Chemical (OTCMKTS:SOMMY) have reignited optimism around Ginkgo’s strategy.
The company’s financial resilience is evident in its latest earnings, boasting $1.1 billion in cash and equivalents. While challenges lie ahead, this buffer ensures the company can continue pursuing its vision at a healthy pace.
Its stock recently soared over 15% after announcing a five-year alliance with Google Cloud. This collaboration, aiming at AI-driven genomics and synthetic biology innovations, opens massive horizons in areas including drug discovery and industrial manufacturing.
Kratos Defense (KTOS)
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Kratos Defense (NASDAQ:KTOS) is a top aerospace and defense player and a beacon of modern innovation and strategy. The current geopolitical tapestry aside, the company’s technological breakthrough makes it one of the best Cathie Wood’s stocks to buy.
Central to Kratos’ portfolio is its specialization in unmanned aerial vehicles, with the XQ-58A Valkyrie standing as a prime example. This experimental stealthy unmanned combat aircraft, should it transition to full-scale distribution, with the potential to redefine aerial combat.
Reflecting its promise, Kratos Defense’s recently released second-quarter Non-GAAP earnings-per-share of nine cents surpassed estimates by four cents.
With revenue clocking in at $256.9 million, marking a 14.6% year-over-year growth, and projected revenues for the year revenues positioned at $980 million to $1 billion, down slightly from analyst estimates at the midpoint.
The company underpins its financial robustness and underscores its relevance in the ever-evolving defense sector.
UiPath (PATH)
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UiPath (NYSE:PATH) stands at the forefront of business automation, offering software combining robotic process automation along with artificial intelligence.
UiPath’s turnkey solutions showcase its versatility in sectors such as banking and healthcare. Remarkably, the firm’s growth trajectory has been steep, hitting $1 billion in sales by fiscal 2023, coupled with notable profitability enhancements. Its growing customer base skyrocketed from 3,000 in 2019 to a staggering 10,800 by 2023.
It has presented itself as a backbone for enabling scale enterprise automation. Despite the turbulence, UiPath boasts a 28% annual recurring revenue growth from the last quarter.
Its robust arsenal includes process mining and document understanding, elevating them beyond conventional robotics process automation. In the labyrinth of AI automation stocks, for the discerning investor, PATH is a beacon of untapped value and potential.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
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