The broader market rally has left many investors wondering if there are any growth stocks to buy before a correction. I believe that there absolutely are. Despite the run-up, a number of high-potential growth stocks remain undervalued. Their fundamentals have only gotten stronger.
I believe these stocks are poised for a major bounce-back over the next 12 months. Several have already begun to recover. Now may be the time to establish a position before they really take off.
Investing just $1,000 across these picks could generate market-beating returns. A few even have the potential to become multi-baggers. That means a relatively small investment today might lead to very sizable gains.
BOMBARDIER sign is seen during the 12th China International Aviation and Aerospace Exhibition, also known as Airshow China 2018. BDRBD stock
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Bombardier (OTCMKTS:BDRBF) designs and manufactures business jets for corporations, governments, and wealthy individuals. The Canadian aerospace company has been on a roll lately, with its stock price surging over 78% so far in 2024. I believe Bombardier is well-positioned to benefit from the ongoing boom in private aviation and increased defense spending.
In the first quarter, Bombardier grew its order backlog to $14.9 billion. The company also expanded margins and is on track to deliver 150-155 aircraft this year, up from 138 in 2023. Bombardier’s high-margin aftermarket service revenues jumped 13% year-over-year in Q1.
Analysts are quite bullish on the stock, with 8 out of 11 rating it a “Buy.” I personally believe that this stock could cross $100.
Last week, Bombardier reached a new 3-year labor deal with its union, ending an 18-day strike. The company is also doing its part for the environment, installing thousands of solar panels to slash emissions at its London service center. Thus, the company looks poised to hit its 2025 targets of $9 billion in revenue and $1.6 billion in EBITDA, making it among the best growth stocks to buy.
Paysign (PAYS)
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Paysign (NASDAQ:PAYS) is a leading provider of prepaid card programs and integrated payment processing solutions. The company has been making waves lately with impressive financial results and a promising growth trajectory. In the first quarter of 2024, Paysign’s revenue surged 30% year-over-year to $13.2 million, beating analyst estimates. Net income turned positive at $309,000, a significant improvement from the net loss in the same period last year.
I believe Paysign is well-positioned to capitalize on the megatrend of digital payments and the tailwinds of increasing healthcare spending. The company’s focus on the healthcare industry, particularly its rapidly expanding patient affordability business, sets it apart. It has a pipeline of new programs and partnerships with major pharmaceutical companies. As such, I’m not surprised to see that Paysign’s patient affordability revenue skyrocketed by 305% in Q1 2024.
Analysts are bullish on Paysign’s prospects. The stock is rated a strong buy with a 21% upside potential. As interest rate cuts take effect and transaction volumes rise, I expect Paysign’s growth to accelerate further.
IAC (IAC)
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IAC (NASDAQ:IAC) is a media and internet company that owns brands like Dotdash Meredith, Care.com, and Angi. It also just inked a deal with OpenAI to license Dotdash Meredith’s trusted content like People, Food & Wine, and Better Homes & Gardens. This partnership should translate into high-margin profits as OpenAI pays IAC for the rights to enhance its AI models with this premium content.
In Q1 2024, IAC beat earnings estimates with earnings per share of -34 cents vs the -76 cents expected, though revenue of $929.68 million slightly missed estimates. Analysts seem to agree that IAC is on the right track, with TD Cowen reiterating a buy rating and a $78 price target, viewing IAC as significantly undervalued. Improving EPS should send the stock higher, even if revenue stays sluggish.
The upside potential looks compelling if IAC can deliver on the promise of its OpenAI deal and other initiatives. Count me optimistic on IAC’s prospects to ride the AI megatrend to new heights in the category of growth stocks to buy.
Celsius Holdings (CELH)
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Celsius Holdings (NASDAQ:CELH) sells functional energy drinks and liquid supplements. The stock has plummeted nearly 50% from its 2024 highs amid concerns about slowing growth and high valuation.
I believe this selloff is overdone and presents a compelling buying opportunity for long-term investors. Celsius is well-positioned to capitalize on the megatrends of health and wellness, functional beverages, and fitness. The company reported record Q1 revenue of $355.7 million, up 37% year-over-year, and expects to benefit from expanded distribution through its PepsiCo partnership.
Analysts forecast Celsius’ earnings per share to double over the next two years, with sales projected to increase around 30% annually through 2026. If Celsius can execute on these growth targets while riding the tailwinds of its key market trends, I see significant upside potential for the stock to bounce back strongly in the coming years. The recent dip looks like an attractive entry point for investors willing to hold through any near-term volatility. The analyst price target is also very bullish for a company of this size.
Of course, risks remain. But for those who believe in Celsius’ long-term story, now may be the time to take a swig of this beaten-down beverage stock.
Sea Limited (SE)
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Sea Limited (NYSE:SE) is a tech conglomerate that operates in Southeast Asia. I’ve been bullish on this company for around a year now, and I’m pleased to see the stock making some positive moves recently. In Q1 2024, Sea posted a strong 23% year-over-year revenue growth to $3.7 billion, though it did report a net loss of $23 million. The company’s e-commerce arm, Shopee, achieved record high orders, GMV, and revenue, while its SeaMoney financial services business saw significant user growth. Sea’s gaming unit Garena also rebounded, with its Free Fire game being the most downloaded mobile game globally in Q1.
I believe Sea remains well-positioned to be the “Amazon of Southeast Asia” with its strong market presence in the region’s fast-growing economies. Analysts are optimistic, projecting EPS to jump from $2 in 2024 to $5.65 in 2026, along with sustained double-digit revenue growth. While there may be short-term fluctuations, the long-term prospects for Sea look bright as it rides the tailwinds of e-commerce and gaming growth in Southeast Asia and is one of the best growth stocks to buy in the region.
Direct Digital Holdings (DRCT)
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Direct Digital Holdings (NASDAQ:DRCT) operates an advertising and marketing technology platform. The company’s stock has plunged nearly 87% since peaking in March, but I believe it may have bottomed out near its historical resistance level. At current prices, the potential upside outweighs the downside risk.
Analysts expect margins to expand swiftly, with EPS rising from 26 cents this year to 41 cents next year, accompanied by double-digit revenue growth. The company recently announced partnerships with Amazon Publisher Services and HPE GreenLake, which should attract more demand to its Colossus SSP platform and boost performance. Rate cuts could also boost earnings significantly due to its interest expenses being high.
These positive catalysts make me believe Direct Digital Holdings could soar once again over the next year. The digital advertising megatrend provides a strong tailwind. And with its shares trading at a fraction of their March high, now may be an opportune time for risk-tolerant investors to start a position.
ATRenew (RERE)
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ATRenew (NYSE:RERE) operates the largest pre-owned consumer electronics transactions and services platform in China. The company has been making strides lately, with total revenues growing 27.1% year-over-year to RMB3.65 billion in Q1 2024 and non-GAAP operating income reaching RMB80.2 million. I believe ATRenew’s stock—which has traded between $1-$3 for the past two years—is primed for a breakout in the next 12 months as fundamentals continue to improve.
Management is optimistic about future growth, citing increasing recycling opportunities driven by government action plans and rising demand for used products in China.
Partnerships with major players like JD.com (NASDAQ:JD) and Apple (NASDAQ:AAPL) are fueling ATRenew’s product revenue growth. The company’s multi-category recycling business is also taking off, with transaction value quadrupling year-over-year in Q1. Analysts seem bullish, too – Zacks recently introduced 2024 and 2025 adjusted EPS estimates of 25 cents and 38 cents for ATRenew, implying 90% growth this year and 50%+ next year.
With RMB2.6 billion in cash, a share buyback program underway, and potential dividends on the horizon, I think ATRenew trades well-positioned among growth stocks to buy in order to ride the tailwinds of China’s push toward a circular economy in the coming years.
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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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.