Wall Street’s Hidden Treasures: 3 Underrated Gems in 2024

Stocks to buy

The future of the U.S. economy looks promising. Recent data indicates a significant increase in productivity, reminiscent of the economic boom experienced in the mid-1990s. Technology advances and the widespread adoption of hybrid work models contribute to this positive trend. If sustained, this surge in productivity could lead to higher wages, improved company profitability and overall economic growth. This could mark a potentially transformative period for the U.S. economy. These underrated stocks are ripe to benefit from this and invest for high profits.

Celsius Holdings (CELH)

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Celsius Holdings (NASDAQ:CELH) develops, distributes, and sells energy drinks and liquid supplements. CELH is up 17.63% YTD, with a 12-month median price target of $72 representing a 12.27% increase from its current price of $64.13.

Valued at $90.5 billion in 2022, the global energy drinks market is expected to reach 173.8 billion by 2030, exhibiting a CAGR of 8.5%. This growth is largely due to people’s fast-paced lifestyles, an increasingly competitive environment, and changing working and living patterns, fueling demand for energy drinks. 

In Q3 2023, Celsius crushed analyst estimates, achieving record revenue of $385 million, up 104% YoY. Gross profit for the quarter reached $194 million, up 147% YoY. The company has continually defied longevity skepticism, beating earnings estimates for three consecutive quarters and boasting a levered FCF margin of 15.34%, above the sector median of 4.91%. Management attributes its success to continued reductions in packaging and raw material costs, freight efficiency improvements, and increasing brand awareness. 

Celsius will receive a huge revenue boost from its ambitious international expansion plan. Last month, the company announced it would grow its global sales and distribution segments by launching its products in Canada, U.K. and Ireland. Management announced PepsiCo as the exclusive distributor for Celsius in Canada, whose reach and connections will be invaluable in the region. With international revenue only at $13.6 million, international markets are a significant avenue of growth for Celsius. 

SentinelOne (S)

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SentinelOne (NYSE:S) is a cybersecurity provider that operates AI-powered endpoint protection and cloud security solutions. Its stock has risen 66.35% in the last year but still trades 40.91% below its IPO price. 

SentinelOne competes with established rivals in the global cybersecurity market, forecasted to grow at a CAGR of 12.3% until 2030. Yet, due to SentinelOne’s AI capabilities and unified platform, SentinelOne has outpaced the growth of its competitors and the market. The company’s innovative approach thwarts attacks using a fully autonomous system, which makes it an attractive alternative to its competitors. As SentinelOne grew its customer base by 28% YoY to 11,500 customers in Q3 FY2024, its competitive position remains strong. 

In Q3 FY2024, SentinelOne reported $164.2 million in revenue, a 42% increase YoY. Management expects revenue for the full FY2024 to reach $616 million, reflecting growth of 46% YoY. While SentinelOne is not currently profitable, it increased its GAAP gross margin to 73% in the last quarter, a 9% increase from a year ago. Moreover, management reported that its operating expenses only increased 13% YoY, less than its revenue growth. So, as SentinelOne’s revenue growth outpaces its expenses, it could become profitable in the coming years.

In January 2024, SentinelOne announced that it would acquire PingSafe, a CNAPP solution that will expand SentinelOne’s cloud security capabilities. The company plans to integrate PingSafe into its Singularity Platform, providing a unified AI-powered platform with comprehensive cloud security capabilities. 

United Airlines (UAL)

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United Airlines (NASDAQ:UAL) is a leading airline providing transportation services across all six major continents through its United Airlines and Express divisions. The airline boasts an extensive network, offering nearly 5,000 daily flights.

United Airlines’ financial performance has been remarkable, with its revenue for 2023 reaching $51 billion. This reflects an impressive 19.49% increase compared to 2022 and a substantial rise from 2021. The company has demonstrated robust financial health, evidenced by its ROE Growth (YoY) of 161.16%, a figure significantly surpassing the sector average of -5.58%. The Gross Profit Margin (TTM) stands at 33.27%, indicating a high likelihood of sustained profitability.

To maintain competitiveness, United Airlines embraces innovation by collaborating with Archer to incorporate Electric Vertical Takeoff and Landing aircraft into its fleet. This commitment is exemplified by the airline’s substantial investment of $1 billion in 2021 to acquire 100 eVTOL aircraft, with plans to add 400 through a partnership with Eve Air Mobility by 2026. These cutting-edge aircraft will introduce innovative air taxi routes all over the U.S. This achieves an impressive 80% reduction in emissions, aligning with United Airlines’ ambitious goal of eliminating all emissions by 2050. United Airlines aims to explore new markets and attract a diverse range of passengers through its eco-friendly approach, positioning itself for sustained growth.

The strategic investments in electric aircraft and exceptional financial growth make UAL stock an appealing option for investors.

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.

Michael Que is a financial writer with extensive experience in the technology industry, with his work featured on Seeking Alpha, Benzinga and MSN Money. He is the owner of Que Capital, a research firm that combines fundamental analysis with ESG factors to pick the best sustainable long-term investments.

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