Last year was challenging for all stocks, but high inflation, rising interest rates, and concerns about slowing economic growth hammered growth stocks in particular.
For growth plays in 2023, however, it’s been more of a mixed bag. Starting off the year strongly, the latest wave of macro-related concerns has again placed pressure on shares in fast-growing companies.
However, while perhaps frustrating in the near-term, in hindsight, you may discover that today’s circumstances benefited you if you seized the opportunity by building positions in some of the highest-caliber growth plays out there.
Each of these seven growth stocks earns an A or B rating overall in Portfolio Grader, not to mention high marks for sales growth. Best of all, all of them are currently at favorable prices relative to their growth prospects.
Many investors have bought C3.ai (NYSE:AI) since the start of the year, hoping to capitalize on the rise of artificial intelligence and machine learning.
Yet, after zooming from the low-teens to prices nearing $30 per share, AI stock is now moving in the wrong direction. This may make it seem that further weakness lies ahead.
Still, although shares in this provider of enterprise AI and ML software may stay volatile for now, that doesn’t mean you need to stay away.
With rising demand, as well as the company’s shift to a consumption-based pricing model, CEO Thomas Siebel is confident that C3.ai’s operating performance will materially improve over the next fiscal year.
If strong results roll in over the next few quarters, AI stock, rated B overall but earning an A for sales growth, could take off once again.
Atlas Lithium (ATLX)
With rising demand from electric vehicle battery makers, lithium prices and lithium stocks have performed well over the past year.
While there are many ways to “play” the lithium trend, one you may not have heard of is Atlas Lithium (NASDAQ:ATLX).
As InvestorPlace’s Chris MacDonald discussed last month, investors have been bidding up ATLX stock on the speculation that this company, like Sigma Lithium (NASDAQ:SGML), might be another potential acquisition target of Tesla (NASDAQ:TSLA).
There has been much discussion lately about the EV maker exploring ways to secure permanent supplies of lithium.
ATLX, rated A for both sales growth and overall, may be a winner, even if all of this Tesla takeover talk goes nowhere beyond the rumor mill.
Enphase Energy (ENPH)
Enphase Energy (NASDAQ:ENPH) was one of the rare growth stocks that performed well during 2022. The European energy crisis, along with the Inflation Reduction Act (or IRA) in the U.S., created some strong tailwinds for this provider of micro-inverters for solar energy systems.
Alas, sentiment for ENPH stock has shifted more recently. The market is lukewarm about shares.
Investors are taking a “wait-and-see” approach rather than hop back in, on the assumption that past worries were an overreaction.
This provides a silver lining, though. As I argued earlier this month, while Enphase’s top line growth may decelerate, the prospect of 56.2% sales growth, and 86.7% earnings growth, is definitely nothing to sneeze at.
That’s especially the case as this A-rated growth stock trades for only 38 times estimated 2023 earnings, and 28.3 times estimated 2024 earnings.
Exact Sciences (EXAS)
Exact Sciences (NASDAQ:EXAS) is a biotech firm. However, its primary product is not a breakthrough drug or treatment. Rather, this company develops and sells cancer screening and diagnostic tools.
At present, Exact Sciences’ flagship offering is Cologuard, a non-invasive test for colorectal cancer and related precancerous conditions.
EXAS stock has performed strongly in recent months, thanks to the strong quarterly results. The company released preliminary numbers in January, and actual results last month.
For the December quarter, Exact Sciences’ overall revenue rose 28%, largely because of strong Cologuard sales, as well as sales of its PreventionGenetics product.
Although Exact Sciences still isn’t consistently profitable, markets expect the company to become breakeven on an EBITDA basis this year.
EXAS stock is well-positioned for a further rise, as recent sales growth translates into profitability. EXAS earns a B rating overall in Portfolio Grader, with similarly-high marks for sales growth.
Intuitive Machines (LUNR)
Intuitive Machines (NASDAQ:LUNR) may be in the business of helping NASA get to the moon, but its shares went “to the moon,” following the company’s public debut via a special purpose acquisition company (or SPAC) merger in February.
Although this initial mania for LUNR stock has since calmed down, this is another of the growth stocks where the long-term opportunity has not come-and-gone.
This producer of lunar landers and other lunar access equipment/services expects to experience continued high growth in the coming years by leveraging its success with NASA to build its backlog of commercial contracts.
If all goes right, LUNR’s revenue could hit $759 million by 2024. That’s more than ten times reported 2021 revenue ($73 million). Now back down to earth in terms of its share price, now may be the time to consider this B rated (both in sales growth, and overall) stock.
After getting hammered during 2022, Nvidia (NASDAQ:NVDA) shares have made substantial progress with a comeback in 2023 because of its heavy exposure to the AI and machine learning trends.
Since January, NVDA stock has bolted more than 60% higher, thanks to the recent wave of “AI mania.”
However, much like with C3.ai mentioned above, just because the market is taking a breather from A.I.-related plays, doesn’t mean you need to do so yourself.
As I discussed recently, Nvidia’s CEO, Jensen Huang, along with the sell-side community, are upbeat about the impact of A.I. on future growth.
Meanwhile, NVDA’s other businesses are performing better-than-expected. This comes despite the recent macro challenges.
All of this perhaps makes NVDA, rated B overall in Portfolio Grader, with a B rating for sales growth, a buy on any weakness.
Troika Media (TRKA)
Earlier this month, shares in Troika Media (NASDAQ:TRKA), a provider of branding and marketing technology solutions, spiked higher after reporting strong fiscal results for the six-month period ending Dec. 31, 2022.
For the period, Troika’s revenue soared by an impressive 1125%, with adjusted EBITDA swinging to around $5 million, versus negative adjusted EBITDA of $4.6 million for the prior year’s period.
It’s easy to attribute much of these improved results to an acquisition last year that management has described as “transformational.”
After spiking on earnings, TRKA stock (rated B for both sales growth, and overall, in Portfolio Grader) has fallen back to prior price levels.
While very speculative, keep in mind that shares potentially trading for as little as 6.7 times estimated years for this fiscal year (ending June 2023). If you’re looking for growth stocks at low valuations, consider TRKA a top candidate for your watchlist.
— Louis Navellier and the Investor Place Research Staff
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Source: Investor Place