The stock market makes companies rapidly gain value every day. However, when it comes to companies which increase as much as 10X over half a decade, there are a few common factors such as an innovative product, positive quarterly and annual growth, and earnings which regularly beat estimates. A thorough analysis of these factors allows analysts to capture future trends – at a time which is advantageous for day-to-day investors.
All of the three companies chosen today are emerging yet promising providers of niche services, and fall into these metrics. Given time, they are almost certain to give returns that won’t leave you disappointed.
Riskified (RSKD)
Riskified Ltd. (NYSE:RSKD) partakes in the development and offering of an e-commerce risk management platform that aids online vendors in creating great relationships with their consumers/clients all over the world. It earns money through business-to-business sales, providing companies with services such as chargeback guarantees, policy abuse protection, account security, among others.
RSKD stock is currently trading around $6.11, with a market cap of about $1 billion. Even though it has negative profit and operating margins, the year-over-year (YoY) quarterly revenue growth rate is 10.90% – indicating increasing revenue. It has also consistently beaten EPS predictions for the past four quarters.
RSKD’s consistent EPS beats and YoY revenue growth of 10.90% highlight its potential for future profitability and breaking even. As the company continues to expand its e-commerce risk management services globally, it is definitely one of the potentially explosive under-the-radar stocks you should have on your portfolio!
Rigetti Computing (RGTI)
Rigetti Computing (NASDAQ:RGTI) is one of the few quantum computing stocks available on the wider market. It builds quantum computers and superconducting quantum processors. It also has another source of revenue – allowing consumers to use its quantum computing technology. The company also offers a multitude of professional services.
RGTI stock has been wildly volatile lately, with it beating EPS estimates in only 2 of the last 4 quarters. Despite this, it has a YoY quarterly revenue growth of 38.70%, indicating rapid growth and advancements. While it does have a negative cash flow, indicating that the company is losing money, a cash stockpile of $102.76 million, with a debt of $27.41 million counterbalance this.
RGTI stock is a stock that is both high risk and high reward. Should it make a breakthrough or the broader quantum computing market take off, RGTI stock has a real shot at making you the next big stock millionaire. However, due to its low price, RGTI is seen as a “penny stock”, and stocks of this nature might not be that reliable.
Photronics (PLAB)
Photronics, Inc. (NASDAQ:PLAB) engages in the production and the sale of photomask products and services all over the world. Its photomasks are often used in the manufacturing process of integrated circuits and flat panel displays (FPDs). They are also used to transfer circuit patterns onto semiconductor wafers, and FDP substrates.
PLAB stock is currently trading around $24.93 with a market cap of approximately $1.58 billion. The company has a great profit and operating margin, at 15.14% and 25.83% respectively. It has recently missed EPS estimates, which indicate that management needs to work on internal measures to prioritize sales and efficiency. Analysts have set an average price target of $32, indicating a growth potential of 20.48% in the short term.
The back-end semiconductor market is expected to grow at a rate of CAGR of 8.11% over the long term. While this doesn’t seem indicative of an explosive stock, it is important to know that it isn’t unheard of to hear about stocks trading at above 25X forward P/E in technology, making PLAB a company that I strongly believe is capable of this one-of-a-kind growth, making it a buy.
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Read More:Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Achintya Pasricha 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.