They are often grouped together, but not all growth stocks are the same. Indeed, they are all dramatically different in terms of risk, potential and longevity. One is not inherently as good as the other.
With that as background, here's a look at three popular growth stocks that are crying out for bargains right now. All three may involve above-average risk, but if you can stomach it, the future reward is well worth it. In random order…
RocketLab USA
For decades, putting satellites into orbit was primarily the job of NASA (or other countries' government-funded space programs). It just didn't make financial sense for a telecommunications company to handle this occasionally necessary work itself.
However, as most investors would expect, things changed on this front. The need for communications satellites exploded and the cost of putting them into space plummeted. It turns out that NASA's extra-large rockets are not ideally suited to putting many smaller satellites into orbit.
Enter RocketLab USA (NASDAQ: RKLB). It is one of the alternatives to the services of NASA, or even to privatized companies with large launches. Rocket Lab's relatively small (and reusable) electron and neutron rockets have put 183 satellites into orbit during 47 separate launches. In the meantime, Rocket Lab USA's technology can be found on more than 1,700 satellites already in orbit. NASA is even right one of his paying customers.
And this is just the beginning. Industrial research and consultancy firm Quilty Space believes the world will put an additional 20,000 new satellites in space by 2030. That sets the stage for 21% year-over-year revenue growth in the industry over that time frame, according to a report from Mordor Intelligence.
Rocket Lab USA will likely gain more than its fair share of this growth. Analysts expect the company's revenue to grow 76% this year, and another 47% next year. And while Rocket Lab is still in the red, the analyst community thinks it's on track to turn a profit by 2026. However, stocks could recover from their pullback from the 2021 peak well before then, pending that milestone.
Confluent
Confluent (NASDAQ: CFLT) may not be a household name. However, chances are that you or someone living in your household is taking advantage of the technology without even knowing it. In the simplest terms, Confluent helps companies manage and share their digital data more effectively and reliably.
Anyone delving into the details of the company's operations will likely come across the term “data streaming,” but don't misunderstand the use of the phrase. While Confluent can certainly help with streaming video players Netflix And Walt Disney manage them better streaming operations, in this context the idea is much broader.
The company ensures that its customers' software, apps, and data all work together seamlessly. Paying customers include retailers, financial companies, factories and government agencies, to name a few. Any organization that relies on distributing data via the cloud can potentially benefit from Confluent's services.
And the need for such solutions is nothing short of incredible. UBS expects that the amount of digital data the world processes will be ten times greater by 2030 than in 2020. Most of that growth will likely materialize by the end of this time frame. However, investors don't have to wait to see Confluent benefit from this bullish tailwind. The company is expected to achieve sales growth of almost 23% this fiscal year, before accelerating to a 25% pace next year.
The kicker: Confluent is already profitable, and increasingly so. This year's expected earnings per share of $0.18 is significantly better than last year's $0.04, heading towards next year's expected earnings of $0.33 per share.
It's not clear why the stock just drifted sideways after retreating from its 2021 peak. However, the analyst community disagrees with the current price. Their current consensus target of $34.04 is almost 20% above the current share price, with most analysts rating Confluent stock a Strong Buy.
Iovance Biotherapeutics
Finally, add a biopharmaceutical outfit Iovance Biotherapeutics (NASDAQ: IOVA) to your list of red-hot growth stocks to buy now.
It's far from a household pharmaceutical name, especially since it didn't have a revenue-generating product until early last year. It then acquired Proleukin from Clinigen Limited, which stimulates the T-cell responses of cancer patients once they receive a tumor-infiltrating lymphocyte infusion. This generated the very first revenue for the company, but was ultimately part of a larger strategy.
In February of this year, the U.S. Food and Drug Administration approved Iovance's Amtagvi, which is—you guessed it—a tumor-infiltrating lymphocyte. It is the first time the FDA has ever approved such a therapy for solid tumors.
It's almost needless to say that Amtagvi is Iovance's current flagship drug. And that should be the case. GlobalData's cancer drug analyst Jasminemay Barcelon believes Amtagvi's annual revenue could reach the $1 billion mark by 2030. And even that outlook could be too conservative; Barcelon suggests that “this number could be even higher after the accelerated approval due to multiple factors.” She points out that “the company's pipeline also includes potential label expansions into other solid tumors, with ongoing studies of Amtagvi as a monotherapy in cervical cancer and in combination with immune checkpoint inhibitors for melanoma, cervical cancer and non-small cell lung cancer (NSCLC). .”
For perspective, the current market cap of this company is just under $4 billion.
Biopharmaceutical stocks are risky and generally volatile, especially if they represent young or unprofitable companies. Iovance Biotherapeutics is both, so the stock is unlikely to be an exception to this predictable volatility. Brace yourself as you dive in.
However, if your stomach can handle it, this choice might be worth the seasickness.
Should you invest $1,000 in Rocket Lab USA now?
Consider the following before purchasing shares in Rocket Lab USA:
The Motley Fool Stock Advisor The analyst team has just identified what they think is the 10 best stocks for investors to buy now… and Rocket Lab USA wasn't one of them. The ten stocks that survived the cut could deliver monster returns in the coming years.
Think about when Nvidia created this list on April 15, 2005… if you had $1,000 invested at the time of our recommendation, you would have $544,015!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including portfolio building guidance, regular analyst updates and two new stock picks per month. The Stock Advisor is on duty more than quadrupled the return of the S&P 500 since 2002*.
*Stock Advisor returns April 30, 2024
James Brumley has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Confluent, Iovance Biotherapeutics, Netflix, and Walt Disney. The Motley Fool recommends Rocket Lab USA. The Motley Fool has one disclosure policy.
Do you have $500? These popular growth stocks are crying out for buys right now was originally published by The Motley Fool
