With earnings season upon us, investors will benefit from several stocks that will get a bump in the next few weeks. However, once the market digests those results, summer will be here. And that brings to mind the slogan, “Sell in May, and go away”.
Summer is a historically slow season for equity investors. Stock analysts and investors begin to exchange their trading floor for the beach. This is one reason why the market typically acts like a lazy river throughout the dog days of summer. However, some stocks will show the ability to deliver rapid growth even when the broader market is taking a vacation. And when they do, you better believe that more investors will pile into them, which can propel them to higher highs.
Here, in no particular order, are eight stocks that are among the fastest growing right now. These stocks don’t necessarily lead their industry or sector. And being on this list doesn’t mean they don’t face challenges. However, each of these companies has shown rapid growth recently and are projecting that growth to continue in the short term.
Quick Links
- Autodesk
- Netflix
- Etsy
- Facebook
- JD.Com
- Ctrip.com
- Weibo Corp
- Godaddy, Inc.
#1 - Autodesk (NASDAQ:ADSK)
Autodesk (NASDAQ: ADSK) - Our first stock is Autodesk. This stock is up an impressive 38% since the start of 2019. Software-as-a-Service (SaaS) is becoming a vital part of the new economy. In late December, ADSK completed an acquisition of PlanGrid, a construction productivity software provider. This has helped propel the stock as investors and analysts recognize how PlanGrid will complement Autodesk’s construction portfolio in helping real estate owners and contractors manage the bid process in the preconstruction phase. Autodesk is also showing a strong ability to add new subscribers to their architectural and engineering software that includes a large collection of 3D modeling and computer-aided drafting (CAD) platforms. And the company is also doing a good job of converting current customers to move from a maintenance plan to a subscription plan. All this means that revenue is surging and investors are noticing. Autodesk had a strong fourth quarter of 2018 that was largely shrugged off by investors (the stock actually went down 11% in December). However, since the beginning of the year, the stock has been surging forward, and with revenue and GAAP earnings per share (EPS) projected to increase 27% year-over-year by the middle of 2019, the gains of the past six months look to be anything but a fluke.
About Autodesk
Autodesk, Inc provides 3D design, engineering, and entertainment technology solutions worldwide. The company offers AutoCAD Civil 3D, a surveying, design, analysis, and documentation solution for civil engineering, including land development, transportation, and environmental projects; BuildingConnected, a SaaS preconstruction solution; AutoCAD, a software for professional design, drafting, detailing, and visualization; AutoCAD LT, a drafting and detailing software; computer-aided manufacturing (CAM) software for computer numeric control machining, inspection, and modelling for manufacturing; Fusion 360, a 3D CAD, CAM, and computer-aided engineering tool; and Industry Collections tools for professionals in architecture, engineering and construction, product design and manufacturing, and media and entertainment collection industries.
Read More - Current Price
- $307.84
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 13 Buy Ratings, 8 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $302.38 (1.8% Downside)
#2 - Netflix (NASDAQ:NFLX)
Netflix (NASDAQ: NFLX) - Another stock that is off to a fast start in 2019 is Netflix. So far in 2019, the stock has surged 38% after falling victim to the correction that befell the broader market in December 2018. The question that investors seem to be shrugging off is the effect that Walt Disney’s new streaming service will have on the streaming giant’s subscriber base. Recent surveys project up to 14% of Netflix subscribers will drop their service in favor of Disney. On the other hand, 20% of current subscribers anticipate they will subscribe to both services. Perhaps more significantly, Netflix showed strong subscriber growth in the first quarter of 2019. This is important because Netflix recently increased the price of their service so adding subscribers at a time when they are raising prices is a strong revenue story. A larger question that investors continue to monitor is whether the company’s original content can help offset the content they will be losing from Disney. Programming such as “House of Cards” put Netflix on the map. In 2019, the company is expected to launch new seasons of some of its most popular series including “Stranger Things”, “Orange is the New Black”, “The Crown”, and “Money Heist”.
About Netflix
Netflix, Inc provides entertainment services. It offers TV series, documentaries, feature films, and games across various genres and languages. The company also provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, TV set-top boxes, and mobile devices.
Read More - Current Price
- $883.85
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 24 Buy Ratings, 9 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $758.76 (14.2% Downside)
#3 - Etsy (NASDAQ:ETSY)
Etsy (NASDAQ: ETSY) - The numbers don’t lie. Etsy’s stock is up over 40% in 2019. Etsy was a stock that was stuck in neutral for many years. Some of that may have been due to the expectation that Etsy would fall victim to the Amazon effect, particularly as Amazon introduced its Handmade product. However, that threat has never materialized. In 2018, investors and analysts took notice, and the stock started its ascent. But is the stock a one-year wonder? The fundamentals would suggest not at all. One reason for this can be found in a healthy balance sheet that shows the company generating more than enough incoming cash to cover the interest on its $282 million debt load. It also appears that the market may be catching up to a stock that has been undervalued. Over the past five years, ETSY has reported positive year-over-year earnings growth. And that story becomes even stronger when you compare their average annual growth rate of 57% to the industry average of 23%. The company has also delivered a 19% return on equity (ROE) which also comes in above the industry average of 12%.
About Etsy
Etsy, Inc, together with its subsidiaries, operates two-sided online marketplaces that connect buyers and sellers in the United States, the United Kingdom, Germany, Canada, Australia, and France. Its primary marketplace is Etsy.com that connects artisans and entrepreneurs with various consumers. The company also offers Reverb, a musical instrument marketplace; Depop, a fashion resale marketplace; and Elo7, a Brazil-based marketplace for handmade and unique items.
Read More - Current Price
- $50.86
- Consensus Rating
- Hold
- Ratings Breakdown
- 8 Buy Ratings, 12 Hold Ratings, 4 Sell Ratings.
- Consensus Price Target
- $64.87 (27.5% Upside)
#4 - Facebook (NASDAQ:META)
Facebook (NASDAQ: FB) - If you’re a fan of trading on the news, Facebook is a confusing stock. It was recently announced that the social media giant was facing a fine of up to $5 billion from the Federal Trade Commission (FTC). That would seem to be yet another reason to stay away from a stock that has faced some serious headwinds regarding privacy concerns, disappointing earnings reports, the outrage over the platform being used as a medium to “broadcast” the tragic New Zealand shootings, and the beginnings of what is being described as social media fatigue. Those problems, to differing degrees, still exist. However, if you’re a fan of trading on the news, it’s also tough to ignore Facebook’s exceptional first quarter results which have helped push their stock up 43% YTD. In that report, Facebook was showing that they still had a strong user base and that user base is proving to be very strong outside of North America. But the bottom line is that advertisers don’t have other viable alternatives to Facebook, which means the company will maintain their revenue stream for the foreseeable future.
About Meta Platforms
Meta Platforms, Inc engages in the development of products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables worldwide. It operates in two segments, Family of Apps and Reality Labs. The Family of Apps segment offers Facebook, which enables people to share, discuss, discover, and connect with interests; Instagram, a community for sharing photos, videos, and private messages, as well as feed, stories, reels, video, live, and shops; Messenger, a messaging application for people to connect with friends, family, communities, and businesses across platforms and devices through text, audio, and video calls; and WhatsApp, a messaging application that is used by people and businesses to communicate and transact privately.
Read More - Current Price
- $565.52
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 37 Buy Ratings, 4 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $634.10 (12.1% Upside)
#5 - JD.Com (NASDAQ:JD)
JD.Com (NASDAQ: JD) - Another stock that is up nearly 40% in 2019 is JD.Com, an e-commerce competitor to Amazon.com. Operating out of China, JD.Com is the “little brother” to Alibaba. But that may be where it’s advantage lies. Investing in JD.Com will require investors to be comfortable with the company’s lack of income and uncertain profitability forecast. However, the first step for JD.Com is to expand their footprint, which they seem to be doing. Plus, although some indicators suggest China’s economy is slowing, a productive resolution to the ongoing trade talks between the U.S. and China would bode well for the economy of both countries. E-commerce growth in China is expected to grow from $470 billion in 2018 to $839.54 billion by 2021. A concern going forward is the controversy surrounding their CEO Richard Liu. Although an accusation of rape was dropped, the accuser has since filed a lawsuit against Liu, but the CEO is still facing a social media backlash that is putting the company in the news for the wrong reasons. In the long term, Alibaba may be the better stock, but for the rest of 2019, JD.Com’s stock appears it has room to run.
About JD.com
JD.com, Inc operates as a supply chain-based technology and service provider in the People's Republic of China. The company offers computers, communication, and consumer electronics products, as well as home appliances; and general merchandise products comprising food, beverage and fresh produce, baby and maternity products, furniture and household goods, cosmetics and other personal care items, pharmaceutical and healthcare products, industrial products, books, automobile accessories, apparel and footwear, bags, and jewelry.
Read More - Current Price
- $35.18
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 10 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $40.36 (14.7% Upside)
#6 - Ctrip.com (NASDAQ:CTRP)
Ctrip.com (NASDAQ: CTRP) - Another Chinese company that is absolutely crushing it in 2019 is the online travel agent Ctrip.com. The company’s stock is up 53% in 2019. In fact, after many companies entered the online travel space, CTRP appears to be the sole survivor. Top line revenue was expected to grow 16.1% last year and, despite the ongoing trade war, is expected to grow 18% this year. In March, the company reported fourth-quarter numbers that beat both topline and bottom line estimates. One of the primary drivers for this growth is the desire among Chinese consumers to travel internationally, which may correspond to increasing urbanization inside the country. The number of international trips booked by Chinese residents increased by 15% year over year in the first half of 2018. What’s particularly encouraging is that growth is coming from the 5% of the population that owns a passport, which presents a very real long-term growth opportunity.
About Ctrip.Com International
Ctrip.com International, Ltd. operates as a travel service provider for accommodation reservation, transportation ticketing, packaged tours, and corporate travel management in China. The company acts as an agent for hotel-related transactions and selling air tickets; and provides other related services, including sale of aviation and train insurance, air-ticket delivery services, online check-in, and other value-added services, such as online seat selection, express security check, and real-time flight status.
Read More - Current Price
- $64.79
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
#7 - Weibo Corp (NASDAQ:WB)
Weibo Corp (NASDAQ: WB) - Looking to China once again, we present Weibo Corp. Currently, Weibo is up about 18% in 2019, but it has been up as high as 25%. The company has been defined as a hybrid of Twitter and Facebook, but what the company does is not as important as the juicy results it is posting. In the third quarter of 2018, the company posted a 48% year-over-year increase in topline revenue. That impressive gain came with a 19% growth in their user base. These figures highlighted an inconsistency with Weibo. Like other Chinese companies, the stock was battered in 2018 on fears of a slowing Chinese economy and the ongoing tariff dispute with the United States. However, even while their stock was dropping by 43.5%, the company was increasing its year-over-year net income by 54%. Something had to give. In this case, it was investor skepticism. As fourth-quarter results rolled in, Weibo continued to deliver, and investors are now noticing and rewarding the stock in a big way. After breaking through some key technical levels, the stock is showing strong growth that shows no sign of slowing down.
About Weibo
Weibo Corporation, through its subsidiaries, operates as a social media platform for people to create, discover, and distribute content in the People's Republic of China. It operates in two segments, Advertising and Marketing Services; and Value-Added Services. The company offers discovery products to help users discover content on its platform; self-expression products that enable its users to express themselves on its platform; and social products to promote social interaction between users on its platform.
Read More - Current Price
- $9.18
- Consensus Rating
- Hold
- Ratings Breakdown
- 2 Buy Ratings, 4 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $10.23 (11.5% Upside)
#8 - Godaddy, Inc. (NYSE:GDDY)
Godaddy, Inc. (NYSE: GDDY) - Godaddy is all grown up. The website hosting and registration service made its debut on the market with an ad campaign that tested the axiom that “sex sells”. The irreverent approach, however, seemed to serve its purpose and the new ads show a much more mature, socially conscious, company helping customers build their businesses. If you’re going to invest in a commodity industry, you should look for the leader. And that’s what Godaddy provides, a leadership position which is giving the company an economy of scale. In fact, 47% of its 2018 revenue came from its domain registry business. The company is also projecting growth from its 2018 acquisition of Main Street Hub. The bottom line shows double-digit revenue growth both in 2019 (12.3%) and 2020 (11.2%). Is this exceptional growth? No. However, after a long history of losing money, the company is starting to show that it is not only profitable, it can beat expectations. That’s a winning formula for investors of any age.
About GoDaddy
GoDaddy Inc engages in the design and development of cloud-based products in the United States and internationally. It operates through two segments: Applications and Commerce, and Core Platform. The Applications and Commerce segment provides applications products, including Websites + Marketing, a mobile-optimized online tool that enables customers to build websites and e-commerce enabled online stores; and Managed WordPress, a streamlined and optimized website building that allows customers to easily build and manage a faster WordPress site; Managed WooCommerce Stores to sell anything and anywhere online; and marketing tools and services, such as GoDaddy Studio mobile application, search engine optimization, Meta and Google My Business, and email and social media marketing designed to help businesses acquire and engage customers and create content.
Read More - Current Price
- $190.11
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 9 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $173.31 (8.8% Downside)
Summer can be a tricky season for investors who are looking to find high-growth stocks in a market that is showing low volume and direction.
However, every market presents opportunities and that is true this year as well. The stocks in this presentation have shown rapid growth since the beginning of 2019 and, while some of them face larger long-term issues than others, they all look to be good investments for investors who are willing to trade a little volatility for the chance at a strong return, particularly during the summer months, which is a historically bad time to be in equities.
Many of these stocks prove that when it comes to investing, consistency is key. Some of these companies were unfairly punished by the correction that hit the market earlier. However, once the fourth quarter earnings reports were posted, investors changed their tune. And now with many of these companies getting ready to report their first-quarter earnings, these stocks are poised for further growth.
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