Could These Be The Top Growth Stocks To Buy In The Stock Market Today?
Growth stocks have been one of the favorite choices for investors looking to allocate their hard-earned money. This is mainly because they have been providing outsized gains compared to the broader market, at least for the past two decades. There are plenty of top growth stocks that are experiencing explosive growth in the current volatile stock market environment. But you can bet that growth stocks that are delivering impressive results today and can continue to be great long-term investments can be quite hard to find.
How To Find The Best Growth Stocks To Buy?
The hallmark of the best growth stocks to buy may typically include improving fundamentals and a history of bullish trading activity in the shares. This might not be as straightforward as it seems, since growth stocks come in all shapes and sizes. They can be found in any industry, any country, and any stock market globally. There is a lot to sift through.
While the major U.S. benchmarks are sitting at new highs, we know that the overall U.S. economy is still not on a solid footing. It is in times like these, investors need to pay extra attention when investing in growth stocks. With the stock market today continuing to make new highs, it is understandable for some investors to buy any stocks that are trending in the stock market. But investors also need to keep in mind that there could be some pullback in the future. When companies like Tesla (TSLA Stock Report) and Amazon.com (AMZN Stock Report) are marching higher despite the pandemic, it can seem like stocks only move in one direction. Nevertheless, to help safeguard your investment, looking at stocks with good growth prospects and justifiable valuations could be a great way to start. That said, do you have the following growth stocks on your list?
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Top Growth Stocks To Buy [Or Avoid] Now: Snowflake
Snowflake (SNOW Stock Report) is a software stock that has seen massive growth since its initial public offering in September. Snowflake’s cloud-based platform allows customers to consolidate data into a single source of truth to drive meaningful business insights. It also helps build data-driven applications and share data. It is used by a lot of organizations in many different industries. So let’s look at what has been going on recently with Snowflake, and why it has been trending lately.
Snowflake share prices went up to as high as $390 per share earlier this month before correction. Now that the stock seems to be taking a breather after the lockup expires, will it be attractive enough to get you onboard? The software maker issued its first quarterly report as a public company recently. From its report, the company’s revenue grew 119% year over year in its fiscal third quarter, which ended on October 31. Previously, the company reported a 174% rise in revenue from its fiscal-year-ended (FYE) 2019 to FYE 2020. Even Warren Buffett’s Berkshire Hathaway (BRK.A Stock Report) invested in SNOW stock before its initial public offering. Considering all this, eagle-eyed investors definitely have Snowflake in their scopes.
To top it all off, the company said it now has 65 customers contributing over $1 million in product revenue over the last 12 months. In addition to that, Snowflake said that it can widen its gross margins to the mid 70% range. This is by getting more favorable pricing from cloud providers such as Amazon and Microsoft (MSFT Stock Report). It may also cut back on discounts, according to Mike Scarpelli, Snowflake’s finance chief. With all that in mind, is SNOW stock one of the top growth stocks to buy in the stock market today?
Top Growth Stocks To Buy [Or Avoid] Now: PayPal
Next up, PayPal (PYPL Stock Report) continues to see its stock price breaking new highs recently. Some would argue that it is the rise of contactless payment that sent its stock over the roof. But others are saying that it is the meteoric rise of bitcoin that contributes to the rise of PYPL stock. I would go with the latter, and here’s why. According to Pantera Capital, PayPal clients have been buying the majority of the new bitcoin supply. No doubt, PayPal is at the forefront of digital finance. Its services range from mobile commerce to peer-to-peer transfers. And now, offering cryptocurrencies on its platform could lead to asymmetric returns. If crypto becomes fully established and regulated, PayPal could stand to benefit hugely. PayPal’s ability to benefit from the pandemic tailwinds does not diminish its future prospects.
Of course, the company also saw a boost of demand in electronic payments as consumers have been avoiding physical cash. That’s to curb the spread of the novel coronavirus. And this trend contributed significantly to PayPal’s business. On top of that, the company has reached record growth for new accounts this year. By introducing new services and products such as QR codes for payments, PayPal is diversifying its revenue sources. It also recently launched an installment payment program called Pay in 4, which allows customers to pay in installments, interest-free. That brings PayPal head to head with “buy now, pay later” companies like Affirm, which recently filed for an IPO.
The thing is, PayPal has been attracting investors’ attention for some time now. Not long ago, PayPal also announced the launch of a new fundraising service. PayPal calls it the “Generosity Network”, which will take on the likes of GoFundMe. This is part of the company’s increasing reach across more parts of financial services. With this new service, one can set up a fundraising page to enable donations within PayPal’s platform. As digital payments continue to gain more traction, is PYPL stock a top growth stock to watch over the next decade?
Top Growth Stocks To Buy [Or Avoid] Now: Chewy
Chewy (CHWY Stock Report) is an e-commerce company for pet food and other pet-related products. The Florida based company is a trusted online destination for pet parents and partners worldwide. According to the American Pet Products Association, pet spending in the U.S. was $95.7 billion in 2019 and is forecast to reach $99.0 billion this year. This implies that Chewy has plenty of room to keep growing.
From the company’s third-quarter earlier this month, the company reported net sales of $1.78 billion, which grew by 45% year-over-year. Chewy also reported an impressive 17.8 million active customers, a 39.8% increase compared to a year earlier. These are truly impressive figures that would be able to sustain the company’s long-term growth. In the company’s financial guidance for its fourth quarter, Chewy expects net sales of $1.94 billion to $1.96 billion, which is a 43% to 45% growth year-over-year.
Despite such strong performance, Chewy is not resting on its laurels. It is going into new segments such as pet telehealth and compounding pharmacy services. The company may also introduce online services such as a marketplace for groomers and other service providers. The expansion of Chewy into these areas could be rewarding given the large pool of customers the company already has. With such exciting development surrounding the company, will you have CHWY stock on your watchlist?