The stock market is constantly buzzing with hype surrounding the latest trends and hottest tech companies. However, amidst the noise, a wealth of overlooked growth stocks with strong fundamentals can present lucrative investment opportunities.
These stocks are often overshadowed by industry counterparts, despite their strong track records of success. Within this landscape of underappreciated potential, several sectors, from payments to retail, offer interesting long-term investment cases. By uncovering these overlooked growth stocks, investors position themselves to potentially realize substantial gains.
Now, let’s discover the top overlooked growth stocks to buy for outsized returns!
Oracle (ORCL)
Oracle (NYSE:ORCL) is a software behemoth quietly making its case as one of the top overlooked growth stocks to buy in 2024. Its push into generative AI led by its Gen2 cloud infrastructure further bolsters its long-term growth prospects.
Oracle might not have the immediate appeal of some of the high-flying legacy tech companies. However, the company’s cloud infrastructure and enterprise applications are gaining traction as businesses increasingly migrate to cloud-based solutions. Its focus on autonomous databases and analytics, fueled by artificial intelligence, promises further efficiency gains for its customers. In ORCL’s Q3 FY24 results, revenue increased 7% year-over-year (YOY) to $13.28 billion. Net income rose 27% YOY to $2.4 billion, or $0.85 per share. Oracle’s cloud business is at a $20 billion annual run rate in 2024 as the company continues to sign large new cloud infrastructure contracts. As Oracle rapidly expands its data center footprint, now is a great time to snap up shares for the long term.
Paychex (PAYX)
Paychex (NASDAQ:PAYX) is another company often overlooked in favor of flashier businesses. Nonetheless, its essential payroll processing and HR software solutions give it a significant competitive edge.
Paychex serves small to medium-sized businesses, a market segment often underserved by large technology providers. This niche gives the company remarkable resilience, even during economic downturns. Additionally, its recurring revenue model, driven by long-term client subscriptions, leads to steady revenue growth, earnings and cash flow from operations. The company has also been expanding its service offerings, adopting new cloud solutions and AI capabilities to enhance its value proposition. In PAYX’s latest quarterly results, Paychex maintained steady revenue growth and earnings amidst rising inflationary pressures. The company’s FCF has grown substantially over the last several years while maintaining steady dividend growth. As businesses grapple with increasingly complex HR regulations, Paychex’s solutions will become even more dispensable.
DICK’s Sporting Goods (DKS)
DICK’s Sporting Goods (NYSE:DKS) might seem like an unusual choice when in consideration for the best overlooked growth stocks to buy. However, the company has demonstrated impressive agility in adapting to evolving consumer preferences.
DICK’s Sporting Goods is one of the few retail companies in the United States that has adapted to how customers shop. Its focus on omnichannel experiences, integrating both online and physical stores, continues to pay dividends. The company’s private label brands as well as strong community engagement through in-store events and partnerships drive sales and increased visibility to its brands. In the 2023 fiscal year, revenue increased 5% YOY to $12.98 billion. Comparable sales saw modest growth, with EPS up 13% to $12.18 per share. The company’s cash flow and profitability have remained strong, leading to a 10% increase in its annual dividend. While e-commerce giants remain a threat to their business, DKS stock is holding its own due to its savvy strategies.
On the date of publication, Terel Miles did not hold (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.