The number of coronavirus cases in the United States and Europe has risen dramatically in the last few days. In the past six days, 1 million new coronavirus cases were recorded in the United States, taking the total tally to more than 11 million. While this has made the market even more uncertain, companies having strong growth characteristics and a pandemic-ready business model should keep benefiting.
With the fear of a second wave keeping the market sentiment bearish, it is perhaps the right time to buy the dip in these growth stocks. Many such companies are on the Robinhood 100 list, indicating that they are popular.
Amazon.com, Inc. (AMZN), Facebook, Inc. (FB), PayPal Holdings, Inc. (PYPL), and Advanced Micro Devices, Inc. (AMD) are four such growth stocks on the Robinhood 100 list that are leaders in their field.
Amazon.com, Inc. (AMZN)
Based in Seattle, Washington, AMZN is the world’s largest online retailer. It not only dominates the e-commerce domain but also the cloud domain with the help of Amazon Web Services (AWS). The prime day held last month generated nearly $3.5 billion in sales. The company is also expanding in the solar energy domain and has utility-scale solar projects in China, Australia, and the United States. AMZN is on the Robinhood 100 Most Popular list having 94% of the analyst ratings as ‘Buy.’
AMZN’s net sales increased 37.4% year-over-year to $96.1 billion for the third quarter ended September 2020. The company’s sales were boosted with faster deliveries of goods and the commencement of the holiday season. AMZN delivered strong quarter results for AWS also. The net sales from AWS increased 29% year-over-year to $11.6 billion. Net income increased 196.7% year-over-year to $6.3 billion. EPS increased by 192.4% year-over-year to $12.37.
Analysts expect AMZN’s revenue to increase 36.6% for the quarter ending December 2020, 35.4% in 2020, and 18.3% next year. The company’s EPS is expected to grow 51.5% this year, 30.1% next year, and at a rate of 36.4% per annum over the next five years. AMZN’s earnings surprise history looks impressive with the company missing the consensus estimate in just one of the trailing four quarters.
On November 12th, AMZN announced its plans to launch its first fulfillment center in Magnolia, Mississippi which will feature the company’s innovative robotics technology. Ahead of the holiday season, the company’s music arm, Amazon Music announced the launch of original holiday songs from famous singers which will be available on the company’s music platform. Earlier this month, Standard Chartered Bank announced a five-year strategic global agreement with AWS. On a year-to-date basis, the stock rallied 69.3% and is currently trading 13.5% below its 52-week high.
How does AMZN stack up for the POWR Ratings?
B for Trade Grade
B for Buy & Hold Grade
B for Peer Grade
A for Industry Rank
B for Overall POWR Rating
The stock is also ranked #5 out of 58 stocks in the Internet industry.
Facebook, Inc. (FB)
The revolutionary social media company FB led by Mark Zuckerberg needs no introduction. Founded in 2004, the company has grown a huge user base which is a huge advantage for the company. Advertising revenue is the main revenue driver for the company. FB has also grown inorganically over the years, acquiring Instagram, WhatsApp, Oculus VR to name a few. FB is on the Robinhood 100 Most Popular list having 84% of the analyst ratings as ‘Buy.’
FB’s revenue increased 21.6% year-over-year to $21.47 billion for the third quarter ended September 2020. It was primarily driven by people spending more time at home and connecting with people virtually. Monthly Active Users (MAUs) increased by 12% year-over-year to 2.74 billion. Family monthly active people (MAP) increased by 13.8% year-over-year to 3.21 billion. Average Revenue per User (ARPU) increased by 8.7% year-over-year to $7.89. EPS increased 27.8% year-over-year to $2.71 surpassing the consensus estimate by 41.9%.
Analysts expect FB’s revenue to increase 24.3% for the quarter ending December 2020, 18.9% this year, and 23.2% next year. The company’s EPS is expected to increase 23.4% for the quarter ending December 2020, 11.3% next year, and at a rate of 16.6% per annum over the next five years. FB’s earnings surprise history looks impressive with the company missing the consensus estimate in just one of the trailing four quarters.
FB has started on its long-term plan of monetizing WhatsApp which can be a great boost to the growth of the company owing to its huge user base. The company introduced the First AI Model M2M-100 last month that translates hundreds of languages without depending on English. The stock has gained 34.9% year-to-date and is currently trading 10% below its 52-week high of $304.67.
FB’s POWR Ratings reflect this promising outlook. It has an overall rating of “Buy” with an “A” for Trade Grade and Industry Rank and a “B” for Buy & Hold Grade and Peer Grade. Among the Internet industry, it’s ranked #6.
PayPal Holdings, Inc. (PYPL)
Headquartered in San Jose, California, PYPL operates as a digital technology platform enabling digital and mobile payments on behalf of consumers and merchants worldwide. Having more than 325 million active account holders, the company operates in more than 200 markets around the world. Its payment solutions include PayPal, PayPal Credit, Braintree, Venmo, Xoom, and iZettle products. PYPL is on the Robinhood 100 Most Popular list having 84% of the analyst ratings as ‘Buy.’
PYPL reported another historic quarter for the quarter ended September 2020. PYPL’s revenue increased by 24.7% year-over-year to $5.5 billion. The company’s net revenues from the United States increased by 21.2% year-over-year to $2.8 billion. Non-GAAP Net Income increased 41.7% year-over-year to $1.3 billion. Non-GAAP EPS increased by 40.8% year-over-year to $1.07.
Analysts expect PYPL’s revenue to increase 22.6% for the quarter ending December 2020 and 18.7% next year. The company’s EPS is expected to increase 22.3% this year, 19.5% next year, and at a rate of 23% per annum over the next five years. PYPL’s earnings surprise history looks impressive with the company missing the consensus estimate in just one of the trailing four quarters.
PYPL has increased its debit card offerings in Europe and is now available in five new European countries in addition to its existing availability in Germany, the United Kingdom, and the United States. Last month, the company announced the launch of a new service enabling its customers to buy, hold, and sell cryptocurrency directly from their accounts. Ahead of the holiday season, PYPL has introduced Amex send and split which enables split purchases with friends and family on PayPal and Venmo. The stock has gained 74.4% year-to-date and is currently trading 14.4% below its 52-week high.
It’s no surprise that PYPL is rated “Buy” in our POWR Ratings system. It also has a “B” for Trade Grade, Buy & Hold Grade, and Industry Rank. In the 46-stock Consumer Financial Services industry, it is ranked #8.
Advanced Micro Devices, Inc. (AMD)
Founded in 1969 as a Silicon Valley start-up, AMD is a dominant player in the semiconductor industry. The company operates through two segments: computing and graphics, and enterprise, embedded and semi-custom. The company manufactures semiconductor products, including microprocessors, embedded microprocessors, chipsets, graphics, video, and multimedia products for hundreds of millions of consumers, and leading Fortune 500 businesses. AMD is on the Robinhood 100 Most Popular list having 39% of the analyst ratings as ‘Buy.’
AMD’s revenue increased 55.5% year-over-year to $2.80 billion for the third quarter ended September 2020. It was primarily driven by higher revenue from Enterprise, Embedded, and Semi-Custom and Computing and Graphics segments. While AMD’s revenue from the computing and graphics segment increased 30.6% year-over-year to $1.67 billion, the revenue from Enterprise, Embedded, and Semi-Custom segment revenue increased 116% year-over-year to $1.13 billion. Non-GAAP Net income increased 128.8% year-over-year to $501 million. Non-GAAP EPS increased 127.8% year-over-year to $0.41.
Analysts expect PYPL’s revenue to increase 22.6% for the quarter ending December 2020, 20.5% this year, and 18.7% next year. The company’s EPS is expected to increase by 15.1% for the quarter ending December 2020, 19.5% next year, and at a rate of 23% per annum over the next five years. PYPL’s earnings surprise history looks impressive with the company missing the consensus estimate in just one of the trailing four quarters.
Last month, AMD, to establish itself as the industry’s high-performance computing leader, has agreed to acquire Xilinx, Inc. (XLNX) for $35 billion. AMD unveiled the Ryzen Embedded V2000 Series processor on November 10th which not only provides a new class of performance with 7nm technology but also has advanced security features. The stock has gained 77.6% year-to-date. It is currently trading 15.8% below its 52-week high of $94.28.
AMD’s strong fundamentals are reflected in its POWR Ratings, it has a “Buy” rating with an “A” in Trade Grade and Industry Rank and a “B” for Buy & Hold Grade. Within the Semiconductor & Wireless Chip industry, it’s ranked #35 out of 86 stocks.
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AMZN shares were trading at $3,126.78 per share on Monday morning, down $2.03 (-0.06%). Year-to-date, AMZN has gained 69.21%, versus a 13.65% rise in the benchmark S&P 500 index during the same period.
Since she was young, Manisha has had a strong interest in the stock market. She majored in Economics in college and has a passion for writing, which has led to her career as a research analyst. More…
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