3 hot stocks that could continue to beat the market
Let’s face it; September stank for most investors. All three major US indices were down for the month, and many growth stocks saw even steeper declines. But all is not bad; some stocks managed to shine, making gains instead.
Despite the market downturn, these three growth stocks are up over the past month and have the fundamentals that could propel them to outperform going forward.
1. Improve efficiency in companies
Asana (NYSE: ASAN) is a web and mobile application that helps organizations organize and manage the efforts of their employees. It acts as a single platform where teams can communicate, share information and hold each other accountable for completing projects and meeting deadlines.
Just think of a project and all the groups within a company that it touches throughout its journey. An idea often has to go through accounting for the way it’s paid, marketing for the way it’s presented, sales staff for input, all the while swinging between leadership for feedback and approval. Asana’s software helps keep everyone on the same page, which can help people be more efficient at their jobs; fewer emails, fewer phone calls, less frustration.
Its most recent quarter, the second quarter of fiscal 2022, showed 72% year-over-year revenue growth to $ 89 million; it increased 61% the previous quarter and 57% the previous quarter. In other words, growth is accelerating. Asana now has 107,000 total paying customers, and the number of $ 50,000 paid accounts increased 111% in the last quarter, showing that the company’s software is gaining ground in large organizations.
Over the past month, stocks have risen about 30%, showing the strength of most growth stocks during this pullback. Asana’s acceleration in revenue growth demonstrates that the company is operating at a high level and may continue to advance once growth stocks regain market morale.
2. Help banks lend smarter
Holdings reached (NASDAQ: UPST) is a software platform that uses artificial intelligence (AI), instead of a FICO credit score, to approve consumer loans. Credit score is that “mysterious” entity that can have a significant impact on your financial journey. It was developed in the late 1980s before the advent of the digital age.
The company’s AI-powered lending algorithms pull multiple data points to get a more personalized profile of consumers’ finances to make better lending decisions. Upstart claimed that its technology approves loans at the same rate as FICO but has 75% fewer defaults. It also claims a Net Promoter Score of 82 out of 100, a higher score than most traditional banks and an indication that consumers are happy with their experience with Upstart.
If banks are seeing fewer defaults and customers are happier, it’s no surprise that more banks are partnering with Upstart. When it went public, it had ten banking partners; by June 30, 2021, that number had more than doubled to 25 in less than a year. Income growth followed; its annual forecast of $ 750 million represents a growth of 211% year-on-year.
Upstart shares have risen about 30% in the past 30 days, and with more than 5,000 banks and credit unions in the United States alone, the share and the company could continue to grow if Upstart continues to find new partners.
3. Empower the independents
Upwork (NASDAQ: UPWK) is an online marketplace that connects companies with independent talent. There are several skills companies use, such as graphic design or copywriting, for which it is difficult to justify hiring a full-time employee. Freelancing allows companies to access these skills at a lower cost.
People tend to associate the “concert economy” with COVID, but up to a third of the workforce participated in “concerts” before the pandemic. Self-employment has its advantages, such as flexibility when and where you work. Upwork, with its competitor Fifth, are the two main online platforms where freelancers find work.
Upwork’s active customer base has accelerated its growth over the past five quarters, likely due to the pandemic. The company currently has approximately 725,000 customers and has a customer spend retention rate of 114%; customers tend to spend more once they become customers. Income increased behind these tailwinds; The company’s second quarter 2021 revenue increased 42% year-over-year.
The stock has risen around 7% over the past month and has a long-term track for continuing to grow. Management estimates the global freelance opportunity to be worth up to $ 1.3 trillion. Investors will want to keep an eye on the company’s ability to continue to grow its customer base and note whether its customers continue to increase their spending once on the platform.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.