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3 Top-Ranked Growth Stocks to Buy Now

Billionaire Peter Lynch once said, "All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don't work out." That’s the key- picking the monster winners and count the returns that follow suit.

We used the TipRanks’ Stock Screener investor tool to pick three market players bursting with growth potential. Here’s how: we filtered by 1) only stocks with a ‘Strong Buy’ best analyst consensus, and 2) stocks showcasing a best analyst price target reflecting strong upside potential. In other words, stocks that analysts say have room to rally over 20% in value.

Let’s explore:

Alibaba

Chinese e-commerce king Alibaba (BABA) is approaching its first fiscal quarter earnings show for 2019 due August 23. Beyond the print, Alibaba is set to heat up rivalry with Tencent-backed Meituan Dianping: this e-commerce player wants to lead China's lucrative on-demand services market.

How does the BABA team hope to achieve new competitive edge? Reuters is citing sources say Alibaba intends to merge its food delivery units Ele.me and Koubei- and seeks to raise $3 to $5 billion for the combined entity.

Stifel’s Scott Devitt – who ranks #56 out of over 4,800 analysts covered on TipRanks – continues to bat for the bulls on Alibaba. Notably, the analyst upgraded the stock to a Buy back in March 2015- and has been making bullish recommendations on BABA ever since. It’s absolutely paid off- Devitt earns an impressive 34.7% in average profits on his Alibaba ratings. (See Scott Devitt’s other stock recommendations)

Ahead of the print, the analyst reiterates a Buy on BABA with a $256 price target (41% upside potential). Even though Devitt anticipates yuan depreciation to impact Alibaba, he still sees robust return potential ahead.

Regarding total revenue growth, the analyst calls for 69.1% year-over-year to ¥84.9B, noting he expects "marketing, personalization, promotional spending, and the closure of the Ele.me acquisition (late May) to support strong topline momentum.”

Ultimately, “While trade war fears have weighed on investor sentiment, we think concern may be overblown (for now),” contends Devitt.

The ’Strong Buy’ stock has attracted 9 confident Wall Street bulls. How upbeat are analysts in their target expectations? Consider that the 12-month average price target stands tall at $257.89. In other words, analysts are calling for a whopping 41% in upside potential for Alibaba stock. See BABA Price Target and Analyst Ratings Detail.

Electronic Arts

Last month, video game maker Electronic Arts (EA) unleashed its first fiscal quarter results from 2019. The results pushed the stock to stumble 11% in 48 hours. That said, one former cautiously optimistic analyst just turned bullish, seeing a buyer’s advantage here. EA weakness poses a prime opportunity to enter the stock.

In reaction to the print, five-star analyst Joseph Bonner of Argus upgraded EA stock from Hold to Buy. Bonner wagers EA stock could race to $155, eyeing 21% in upside potential. Bonner has been playing it safe on Electronic Arts for the past two years, so it’s a move to not take lightly. (See Joseph Bonner’s other stock recommendations)

Look for Electronic Arts to fare better in its second and third fiscal quarters on the back of its anticipated launch of new titles: including first-person shooter game Battlefield V.

Bonner states that while the videogame industry is dominated by the success of Fortnite, Electronic Arts will have a relatively stronger performance in the September and December quarters thanks to the expected launch of its new titles that includes Battlefield V. This will mark the sixteenth installment in EA’s Battlefield series.

Even one of Wall Street’s best performing analysts is unfazed by the F1Q pullback. Stifel’s Drew Crum advises “not to be deterred” by a rocky opening from EA to its fiscal 2019. Crum boils down apprehensions to sluggish growth for Live Services. Likewise, Crum echoes Bonner’s vote to initiate or add to positions in the video game maker. Crum maintains a Buy on EA with a $159 price target (25% upside potential). (See Drew Crum’s other stock recommendations)

Meanwhile Oppenheimer’s Andrew Uerkwitz makes a bullish case on EA: “EA demonstrated again its ability to steadily grow and resistance to temporary underperformance in certain titles and heated competition. In addition, future slate, a under-monetized China, and experiments with subscription models leave enough optimism for its future.”

The analyst holds tight to the bullish camp, reiterating an Outperform rating with a $140 price target (10% upside potential). (See Uerkwitz’s other stock recommendations)

The ‘Strong Buy’ tech player has fueled enthusiasm despite its recent sell-off. Clearly, Wall Street bulls are not running away any time soon. 12 analysts have made a recommendation to buy this stock over the last three months- with only one hedging his bets on the sidelines. The 12-month average price target of $158.42 reflects healthy upside potential in store for Electronic Arts. Analysts say there is 23% more room for the stock to run. See EA Price Target and Analyst Ratings Detail.

Capital One Financial

Bank holding company Capital One Financial (COF) specializes in credit cards, auto loans, banking and saving products. The stock has jumped over 16% year-over-year and just released a solid second quarter print last month. Capital One Financial reached $1.9 billion in revenue- a stride ahead of the same quarter of last year that saw $1 billion.

COF founder and Chief Executive Richard Fairbank cheered, "We saw credit improvement across our businesses, and growth math is now helping overall domestic credit card trends.”

What is growth math? It’s a phrase Fairbank has called in the past “the upward pressure on delinquencies [and] charge-offs as new loan balances season and become a larger proportion of our overall portfolio.”

The company is doing so well that it just compelled a five-star analyst to leave the sidelines. Piper Jaffray’s Kevin Barker has now joined the COF bulls, upgrading the stock from Neutral to Overweight. Additionally, the analyst has become more upbeat in his expectations, boosting the price target from $98 to $116 (19% upside potential).

Barker is impressed with a stronger credit profile that has risen at a faster rate than he initially anticipated. Meanwhile, any harsh effects from “growth math” is subduing. (See Kevin Barker’s other stock recommendations)

As far as Barker is concerned, the Street is underestimating credit trends that are getting more positive. Additionally, Wall Street is ignoring the lift in NIM thanks to mortgage sales.

The stock has earned a ‘Strong Buy’ analyst consensus rating- 5 buy ratings in three months, and no bears in sight. With a return potential of 25%, the 12-month average price target of $122.80 suggests analysts like the risk/reward on COF stock. See COF Price Target and Analyst Ratings Detail.

Our database spans over 5,000 stocks. Discover your own top stock picks with monster growth potential, in any sector you choose. Go to the Nasdaq Smart Portfolio stock screener now.

This article was written by Julie Lamb.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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