The past year has been a wild ride for growth investors. Tech behemoths and trendy software plays have stolen the spotlight, minting fortunes for those who rode the rally. However, the rising tide didn’t lift all boats equally. While some growth darlings have skyrocketed, others with equally compelling stories have lagged behind.
You can’t help but feel a tinge of FOMO watching the mega-cap tech giants hog the limelight. But here’s the thing — by the time the masses catch on to a hot stock, much of the juiciest gains have already been had. The real money is made by getting in early on the up-and-comers before Wall Street’s bright lights shine on them. Here are seven to take a look into:
DoubleVerify (DV)
Close up hand holding mobile with Digital Advertising and icons, Digital Marketing concept. digital ad stocks
Source: weedezign via Shutterstock
DoubleVerify (NYSE:DV) operates in the digital advertising ecosystem, providing brands with solutions to enhance ad effectiveness and prevent fraud across devices. While the stock sold off recently after mixed Q4 results, I see this as an attractive buying opportunity.
Yes, DoubleVerify’s guidance for the current quarter and full year came in slightly below expectations. However, Q4 revenue still grew 29% year-over-year, and gross margins improved. The company continues executing well amid the digital ad rebound.
Analysts expect over 20% annual sales growth to sustain along with 30%+ EPS expansion in 2024. As marketing budgets increase, DoubleVerify is well-positioned to benefit from its key role in preventing ad fraud and ensuring quality inventory.
DV isn’t a bargain at over 8x 2024 expected sales. But for this sort of growth, combined with the latest 26% selloff, I believe a more premium valuation is warranted. DoubleVerify has durable competitive advantages and an expansive market opportunity as digital ad spend increases globally. I wouldn’t be surprised to see the stock re-approach the $40 level and beyond as execution continues.
Rekor Systems (REKR)
Security Video Camera Vehicle number identification system. Rekor Systems *REKR) makes vehicle identification, artificial intelligence.
Source: Al Serov / Shutterstock.com
Rekor Systems (NASDAQ:REKR) is at the forefront of using AI and machine learning for roadway intelligence solutions. With applications across commercial and government sectors, Rekor is poised to capitalize on accelerating infrastructure spending in the years ahead.
The U.S. government has earmarked over $3 trillion for infrastructure-related projects through post-pandemic bills. This multi-year tailwind should drive robust demand for Rekor’s vehicle recognition and traffic data capabilities as municipalities modernize.
From a financial perspective, Rekor is rapidly scaling both the top and bottom lines. Revenue grew 35% year-over-year in the latest quarter, while net losses narrowed by 78%. While profits are still a ways off, triple-digit sales growth is expected in 2024 as Rekor wins more contracts.
Rekor appears undervalued relative to its potential. The stock trades at just a $200 million market cap, with analysts seeing an 87% upside to a $4.50 price target in one year. That valuation seems very reasonable for a unique AI/infrastructure play.
I believe the risk/reward setup is attractive for risk-tolerant investors at current levels. This stock could easily become a multibagger if execution remains strong.
LiveOne (LVO)
Woman dancing to music while wearing headphones. Music stocks.
Source: Ground Picture / Shutterstock
LiveOne (NASDAQ:LVO) is a music and entertainment platform leveraging innovations in video, digital media, streaming and other emerging technologies. The company has faced recent headwinds but remains well-positioned to benefit from the secular transition toward live streaming and digital content consumption.
The company has been diligently chipping away at its losses, with EPS losses expected to narrow to just 12 cents in FY2024 and a mere 5 cents in FY2025 — a trajectory that positions LiveOne to achieve profitability as early as FY2026.
Furthermore, LVO’s current valuation of just 1.2 times sales seems quite low for a software company. With analysts setting a bullish $6 price target, implying a staggering 280% upside potential, the risk-reward proposition becomes even more compelling.
Revenue grew 14% year-over-year in the latest quarter, though losses widened. But as a growth company, I’m focused more on LiveOne’s ability to sustain industry-leading top-line expansion and operating leverage over time. While future dilution is possible to fund growth initiatives, I’m willing to be patient for execution to play out.
LuxUrban Hotels (LUXH)
Woman standing in hotel room with luggage looking at the view. Hotel stocks.
Source: Boyloso / Shutterstock
LuxUrban Hotels (NASDAQ:LUXH) has plunged over 60% from its highs due to legal issues, including lawsuits alleging failure to pay rent and questions around property lease claims. However, I believe the selloff is overdone compared to LUXH’s still strong financial prospects.
Most notably, 2023 revenue is expected to rise 173% year-over-year to $120 million. 2024 estimates call for a further 122% top-line surge to $265 million. Despite the legal controversies, LuxUrban Hotels’ core business of expanding its hotel footprint is thriving.
LuxUrban Hotels may have overpromised on some leases, but this likely won’t materially impact long-term profitability. The company can still deliver triple-digit growth if it settles disputes and executes well. LUXH trades at just 0.34x 2024 revenue projections, an unwarranted discount.
Speculative investors comfortable with legal overhangs could be hugely rewarded by buying LUXH for around $2.4.
Noble (NE)
Offshore oil rig near Harlingen, Nederlande. Oil producing is a major economic factor in the Netherlands. Growth Stocks for Profit Wave
Source: travelview / Shutterstock.com
I’m bullish on offshore drilling leader Noble (NYSE:NE) as growing global energy demand should drive expanded rig activity. Noble owns and operates a modern fleet of offshore drilling rigs serving oil & gas customers worldwide.
Despite the rise of renewable energy, oil & gas remain essential for transportation, petrochemicals and electricity generation. Per the IEA, oil demand could reach 104 million barrels per day by 2026, up from 96 million bpd in 2019 pre-pandemic. More drilling is needed to meet rising consumption.
Day rates for drilling rigs have rebounded to profitable levels, incentivizing Noble and peers to reactivate idled capacity. The backlog here sits at $4.6 billion.
With oil holding near $80 per barrel, offshore drilling activity should continue increasing. Plus, NE generates strong cash flow to pay down debt and reward shareholders. The dividend yield sits at 3.69%.
Illustration of phone with dollar sign and other graphics symbolizing fintech displayed on and around it, with a blue background. Fintech Stock Bargains. Growth Stocks for Profit Wave
Source: shutterstock.com/ZinetroN
Fintech firm Usio (NASDAQ:USIO) has struggled with the tech/growth stock selloff, but a turnaround could be near. Usio provides cloud-based payment acceptance and card-issuing solutions for a wide range of merchants and banks.
Revenue grew 25% in Q3 to $21 million, and Usio is nearly breakeven, with profits expected in 2024. Yet shares trade below $2, flat for the past 18 months. USIO looks significantly undervalued at just 0.5x 2024 sales against double-digit growth.
The fintech space has been depressed by rate hikes slowing transaction volumes and lending activity. But I expect a bounce back in 2024/2025 as markets stabilize. Usio’s diverse solutions position it well for reacceleration.
USIO has invested heavily in sales and technology, evidenced in Q3’s 25% top-line growth. As investments pay off, Usio is poised to gain share and potentially get acquired.
Valued at just 17x 2024 EPS with profitability nearing, surpassing Wall Street estimates meaningfully could spark a major re-rating.
Atomera (ATOM)
a close up image of a semiconductor. Growth Stocks for Profit Wave
Source: Shutterstock
Semiconductor technology firm Atomera (NASDAQ:ATOM) is finally poised to capitalize on its innovative Mears Silicon Technology (MST). MST enhances transistors, improving chip performance and efficiency.
Despite proven benefits, Atomera struggled to generate sales as semiconductor firms carefully tested new technologies. But a landmark deal with STMicroelectronics (NYSE:STM) changes the narrative.
STMicroelectronics licensed MST for multiple next-gen products, providing crucial production validation. As STMicroelectronics integrates MST into manufacturing, the technology’s benefits will become widely known. This deal positions MST for mass adoption.
Analysts expect $10 million in 2025 revenue, up from just $3 million in 2024. With MST’s potential being realized, 2024 could mark the beginning of a huge growth wave.
On the date of publication, Omor Ibne Ehsan 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.
Omor Ibne Ehsan is a writer at InvestorPlace. He is a self-taught investor with a focus on growth and cyclical stocks that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as cryptocurrencies and penny stocks. You can follow him on LinkedIn.
