3 Monster Growth Stocks That Are Still in the Buy Zone

TipRanks BlogTipRanks BlogDecember 1, 2019

With the holiday season kicking off, investors are shopping the Street for growth stocks. Stocks
of this kind have a clear runway for growth, capable of delivering massive returns
in the years to come. No wonder they are topping wish lists.

However, in a year that has seen the market reach record highs, tracking down these names
is becoming harder and harder to do. But don’t sound the alarm bells just yet.
Wall Street pros remind investors that stocks with outsized growth prospects
are still out there.

In an attempt to lock down these compelling investment opportunities, we turned to
TipRanks. The platform’s Stock Screener tool was able to scan the Street for the
crème-de-la-crème. We mean the tickers offering up serious upside potential
from current levels.

Let’s get started.

GDS Holdings
Ltd (
GDS)

At a 103%
year-to-date gain, all eyes are on GDS Holdings. This combined with a solid Q3
performance and strong long-term growth narrative has made the Chinese data
center developer and operator a must-have name among several analysts.

During the
third quarter, the company saw revenue of RMB1,066 million, inching past the
consensus estimate by about a percent. On top of this, service revenue
increased 41% year-over-year and net loss narrowed from the prior-year quarter.

That being
said, Cowen & Co. analyst Colby Synesael points to its positioning in terms of demand
as a key takeaway. “We believe the company continues to be well positioned in
what is arguably the strongest data center market in the world and is taking
the right steps to secure significantly more supply in its major markets as it
prepares for even stronger demand in 2020,” he commented. Despite the five-star
analyst’s prediction of continued macro and trade-driven volatility, he
believes shares are set to climb higher in 2020. Taking this into consideration,
Synesael reiterated his Outperform rating and bumped up the price target from
$53 to $65. This bolstered target lends itself to a 39% potential twelve-month
gain. (To watch Synesael’s track record, click here)

Meanwhile, RBC
Capital’s Jonathan Atkin cites the development pipeline as placing
GDS on an upward trajectory. With GDS recently getting the go-ahead for 13,000
square meters of downtown capacity in Shanghai and its potential purchase of a
second site in Hong Kong, total capacity lands at 230,000 square meters. “We
believe, based on our discussions with industry contacts, that there is
significant progress yet to come for additional edge-of-town deployments as
well as new Tier 1 markets,” he noted. As a result, Atkin is staying with the
bulls. Not to mention he lifted the price target by 40% to $62, indicating 32%
upside potential. (To watch Atkin’s track record, click here)

Similarly, the rest of the Street has been impressed by GDA. 100% Street support implies a clear message: the stock is a Strong Buy. In addition, the $61 average price target puts the upside potential at 31%.(See GDS Holdings stock analysis on TipRanks)

ACADIA Pharmaceuticals,
Inc. (
ACAD)

ACADIA
Pharmaceuticals wants to help patients battling central nervous system (CNS)
disorders. When we say this name has soared year-to-date, we aren’t kidding. We’re
talking 180% here. Still, analysts think that this is just the beginning.

On November
25, ACAD released topline results from the ADVANCE Phase 2 trial of its pimavanserin
drug in schizophrenia patients. According to the data, patients given the
treatment witnessed a great improvement in Negative Symptom Assessment-16
(NSA-16) total score compared to the placebo. However, the results were
somewhat of a mixed bag as it failed to demonstrate a superior performance vs
the placebo in terms of the Personal and Social Performance (PSP) scale.

Nonetheless,
Cowen’s Ritu Baral maintains a bullish thesis. “Overall,
we view these results to have little impact on ACAD shares due to the earlier
stage of this program and the smaller market size of schizophrenia patients
with predominant negative symptoms relative to pimavanserin’s new opportunity
in Dementia-related psychosis (DRP),” she explained. The five-star analyst goes
on to cite the Phase 3 HARMONY study in DRP patients as an upcoming catalyst.

If this
wasn’t promising enough, its trofinetide drug to treat patients with Rett
Syndrome could also drive substantial gains. Rett Syndrome is a primarily
female congenital neuro-developmental CNS disorder affecting cognition and
sensorimotor function. Given that the drug demonstrated statistically
significant results in a Phase 2 study as well as its potential to treat Fragile
X Syndrome or traumatic brain injuries, Baral kept the recommendation as
Outperform. Based on the $66 price target, she sees 46% upside potential in
store. (To watch Baral’s track record, click here)

In general, Wall Street likes what it’s seeing. 11 Buys and 2 Holds received in the last three months add up to a Strong Buy analyst consensus. At the $56 average price target, shares could surge 23% in the next twelve months. (See ACADIA Pharmaceuticals stock analysis on TipRanks)

Pegasystems
Inc. (
PEGA)

Pegasystems
offers cloud-based software for customer engagement and other operational
needs, with its low-code application development platform allowing organizations
to quickly build apps to meet their customer and employee requirements. Considering
the noteworthy 62% jump year-to-date, one analyst is betting that PEGA will
come out on top in the long-run.

Wedbush
analyst Steven Koenig was impressed by PEGA’s third
quarter results. Despite the fact that investments in cloud infrastructure and government
certifications weighed on EPS, annual contract value growth of 20% year-over-year
and a 7% revenue gain landed right in-line with consensus estimates. While PEGA
may be impacted by the shift to a cloud-first model, the analyst expects this
change to pay off long-term, deeming the software company a “Wedbush Best Idea”.

“Investments
in sales talent and capacity should drive better penetration of large accounts,
perhaps the key to lifting underlying growth rates beyond the 20% level. With
shares trading at 5.6x EV/FY20E revenue and key metrics inflecting positively,
we see PEGA as a top pick into FY20 for GARP-oriented software investors,” he
wrote in a note to clients.

Bearing
this in mind, Koenig tells investors his conclusion that PEGA will ultimately
outperform remains unchanged. Along with the recommendation, the five-star
analyst kept the price target at $95. This conveys his confidence in PEGA’s
ability to rise 22% in the coming twelve months. (To watch Koenig’s track
record, click here)

Looking at the consensus breakdown, it has been relatively quiet in terms of analyst activity. In the previous three months, PEGA racked up 1 Buy rating, giving it a Moderate Buy consensus. Additionally, the average price target of $95 implies 22% upside potential. (See Pegasystems stock analysis on TipRanks)

The post 3 Monster Growth Stocks That Are Still in the Buy Zone appeared first on TipRanks Financial Blog.

Source: TipRanks Blog

Powered by WPeMatico


Newsletter

 Sign up now to receive our Daily Newsletters, straight to your inbox.