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 high-performing growth stocks have emerged from the technology sector. Despite some volatility, strong earnings and impressive sales remain the story for many companies in the technology sector.
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. The Trade Desk TTD
The Trade Desk is a programmatic advertising firm that looks set to grow as algorithmic, real-time bidding proliferates. TTD’s cloud-based platform helps create, manage, and optimize data-driven digital ad campaigns across multiple channels, apps, and websites on a range of devices such as connected TVs and mobile. The Ventura, California-headquarter company allows customers to pay a market-driven price and reach their target audience on the ideal devices. The firm’s offerings have been bolstered by its AI tech, and TTD recently launched its ad buying platform in China. Shares of TTD have skyrocketed over 100% in 2019 and 160% in the past 12 months. TTD stock opened at $242 per share Monday, down 6% off its 52-week highs.
Looking ahead, our current Zacks Consensus Estimate calls for the company’s adjusted Q2 earnings to pop 13.3% on 38% revenue growth. TTD’s full-year revenue is projected to surge 36% to reach $649.96 million, with fiscal 2020’s revenue expected to climb 28.5% higher than our current-year estimate. Plus, the firm has earned a ton of longer-term upward earnings estimate revisions and has crushed quarterly estimates by an average of 50% over the trailing four quarters.
On top of that, The Trade Desk said last quarter that its newer connected TV and audio channels “grew multiples faster” than its more mature units, which is a good sign as smart TVs and digital audio continue to expand. TTD also boasted that its customer retention rate remained over 95% during Q1, “as it has for the previous 21 quarters.” The Trade Desk is currently a Zacks Rank #1 (Strong Buy).
2. Roku ROKU
Roku is a pure-play video streaming firm that looks set to grow as part of the broader expansion of industry giants such as Netflix NFLX, Amazon Prime AMZN, and soon enough Disney DIS and others. The Los Gatos, California-based firm’s streaming devices currently boast a larger market share than rivals like Apple TV AAPL, Amazon Fire TV, and Google’s GOOGL Chromecast, according to eMarketer. Roku also estimated that more than one-in-three smart TVs sold in the U.S. during the first quarter of 2019 were Roku TVs. Furthermore, the Roku Channel, which allows users to watch free streaming movies and TV shows, could become more popular and highly attractive to advertisers.
Roku stock opened at $102.99 on Monday, not too far off the firm’s 52-week intraday trading high of $108.32 per share. Overall, Roku stock has skyrocketed 230% in 2019. Roku’s Q2 2019 revenue is projected to jump 43.3% to $224.8 million, with full-year revenue expected to climb 39.7% from $742.5 million in 2018 to $1.04 billion.
At the bottom end of the income statement, Roku is projected to post an adjusted full-year loss of -$0.60 per share, which would represent a massive downturn from 2018. But investors should note that Roku posted a much lower-than-projected loss in Q1 and has topped estimates by an average of 86% over the trailing four periods. Peeking further ahead, Roku’s adjusted earnings are projected to climb by 19% over the next three to five years on an annualized basis. Roku is currently a Zacks Rank #1 (Strong Buy) that has seen its fiscal 2019 and 2020 earnings estimate revisions trend upward recently.
3. Square SQ
Shares of Square are up 30% this year despite a somewhat prolonged downturn. With that said, SQ stock has climbed over 13% in the past month and opened at $72.98 per share on Monday, down roughly 27% from its 52-week highs. Square, which is run by Twitter TWTR CEO Jack Dorsey, has transformed from a credit card processor for the mobile age into a more complete financial services firm.
Today, SQ’s portfolio includes business loans, peer-to-peer payment platforms, debit cards, and much more. It is also important to note that SQ has become more attractive to larger businesses and its P2P payment offering, the Cash App, stands out against rivals PayPal PYPL in a world where digital payments continue to grow.
Look ahead, Square’s adjusted full-year EPS figure is expected to soar 61.7% to reach $0.76 per share on 36% revenue expansion—that would see its reach $4.48 billion. Meanwhile, Square’s fiscal 2020 revenue is expected jump 28.5% above our 2019 estimate to reach $5.75 billion, with its 2020 earnings projected to jump 47% higher than our current-year estimate. And Square’s longer-term earnings revisions activity helps it earn a Zacks Rank #2 (Buy) at the moment.
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The Walt Disney Company (DIS) : Free Stock Analysis Report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
The Trade Desk Inc. (TTD) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Square, Inc. (SQ) : Free Stock Analysis Report
Twitter, Inc. (TWTR) : Free Stock Analysis Report
PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Roku, Inc. (ROKU) : Free Stock Analysis Report
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