If you’re considering growth stocks to buy to enhance your portfolio, look no further. Recently, Jerome Powell stated that the Federal Reserve can be flexible in price hikes, with his remarks on how “inflation has moved down from its peak — a welcome development — it remains too high […] We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”
This week, the United States Treasury yields were lower, as the benchmark of the 10-year Treasury yield was down 2 basis points at 4.23% and the 30-year Treasury note decreased less than 1 basis point to 4.29%. The falling yield can indicate caution in the markets, as bond prices would usually increase from the inverse relationship. However, we found the three most promising up-and-coming growth stocks to buy. They are adequately adjusting to the inflationary environment with high growth prospects in mind.
Aurora Innovation Incorporated (AUR)
Aurora Innovation Incorporated (NASDAQ:AUR) is a leading self-driving vehicle company. Its competitive advantage comes from its breakthrough driving system, the Aurora Driver, which detects distant objects’ distance and velocity by using FMCW lidar technology. This technology is growing rapidly because the system learns more about unique situations through simulations and testing on real-life cars.
AUR stock has witnessed tremendous amounts of growth, and is up 177.59% year-to-date (YTD). And if you’re looking for growth stocks to buy, analysts are bullish about AUR stock, with 4 maintaining a “strong-buy” rating along with an average predicted price target of $5.15. Aurora competes in the self-driving vehicle market, which is growing at a 13.3% CAGR from 20.3 million units in 2021 to 62.4 million units by 2030. The sector’s primary growth driver is the amount of impact autonomous vehicles could have on society’s transportation. Theoretically, driving would be safer and more convenient.
Financials for Aurora have been recovering at a rapid rate over the years. As such, the net income of -$218.00 million has increased by 81.11% year-over-year (YOY). Cash from investing amounting to $174.00 million increased by 34.88% YOY. These are all healthy and strong indicators of profitability and recovery in operations.
Although sales growth as of last year decreased by 17.61%, the company is positioned to make a large amount of profit. This is due in part to partnership with a vast number of industry leaders such as Toyota (NYSE:TM), Volvo (OTCMKTS:VLVLY), and FedEx (NYSE:FDX). Additionally, the firm’s key catalyst, the Aurora Horizon, will be a game-changing product that will allow freight truck fleets to operate autonomously by using the Aurora Driver. Partnering with PACCAR, Aurora will develop a vehicle platform that is set to launch in Texas next year. The partnership allows the company to manufacture the vehicles at scale. This means that the Horizon can launch quickly in other states and regions while meeting increased demand.
Due to its innovative self-driving system and the Horizon, AUR stock is perfect for investors interested in growing robotic stocks.
Permian Resources Corporation (PR)
Permian Resources Corporation (NYSE:PR) is focused on driving sustainable returns through high-return oil and natural gas properties. PR stock is up 55.40% YTD.
Many are concerned with the future of oil and gas with increasing concerns for sustainability and reduced carbon emissions. However, the global oil and gas market is still expected to steadily grow at a 4.3% CAGR, from $7.33 trillion in 2023 to $8.67 trillion in 2027. This is mainly due to increasing demand from China and India as their populations grow.
Permian Resources reported solid financials this quarter. Revenue of $623.4 million grew a strong 31.9% YOY, although it missed expectations by $19.7 million. Non-GAAP EPS of $0.27 also missed expectations by $0.05. However, the company has made solid growth in production, with both crude oil and total average production increasing by 8% quarter-over-quarter.
Permian Resources recently announced its acquisition of Earthstone Energy in an all-stock transaction. This created what the company calls a “$14 billion premier Delaware Basin exploration and production company.” The acquisition will add 223,000 net acres, bringing PR’s holdings to over 400,000 acres. The deal should be highly accretive to free cash flow, growing at least 30% per year for 2 years and at least 25% per year for 5 and 10 years. Synergies should drive $175 million of annual cash flow improvement. This will allow the company to increase its dividend by 20%.
Yahoo! Finance reports 13 analysts with a mean 1-year price target of $15.54, ranging from $13.00 to $19.00. 8 out of 12 firms have rated the company as a “buy.” The steady growth of the oil and gas market combined with Permian Resources’ commitment to sustainable returns means an excellent outlook for the company. The recent Earthstone acquisition makes it a must-buy for investors looking for sustainable growth.
Livent Corporation (LTHM)
Livent Corporation (NYSE:LTHM) is an American company in the specialty chemicals industry, specializing in lithium metal and chemicals. Yahoo! Finance reports 10 analysts predicting a 1-year price range on LTHM stock to be between $27.00 and $38.00, with a mean of $32.00.
The specialty chemicals industry should reach a valuation of $998.90 billion from a 5% CAGR by 2028. The industry has experienced increased demand from multiple other industries. This includes the need for innovative chemicals to meet increasing global food demand in the agrochemical industry. The need for essential minerals as well as special polymers is also increasing alongside the growth of the Electric Vehicle industry.
LTHM boasts strong financials, with $235.8 million in Q2 revenue growing at a 7.82% 1-year CAGR. LTHM has demonstrated improved profitability through a net profit margin of 38.2%. The company’s management is able to manage its assets well, reporting $2.28 billion in total assets growing at a 32.7% 1-year CAGR. Lastly, LTHM shows signs of being undervalued with an EPS of $0.50 growing 37.8% YOY.
Livent has had two major partnerships this year that set the company up for future success. Livent has collaborated with Silicon Valley-based Sakuu Corporation with a project currently in the testing phase. The goal of the project is to combine the 3D printing technologies of Sakuu with the lithium chemical expertise from Livent to create 3D printable lithium-ion batteries. If this goal is achieved, the 3D printing process will increase the manufacturing efficiency of batteries. It will in turn disrupt the lithium-ion battery industry. Livent has also entered a $10.6 billion merger-partnership with Australian lithium mining company Allkem Limited. This partnership allows Livent to improve lithium metal production through a direct supply of lithium ore from Allkem.
LTHM is a specialty chemicals stock with massive potential for growth. This is due to its strong financials, key partnerships, and more mentioned above. You won’t want to leave if off the list of growth stocks to buy.
On the date of publication, Michael Que did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.