As we enter the final month of the first half of the year, investors’ focus is on the next six months and beyond. As a result, you might be on the hunt for the best growth stocks for the second half of 2023.
The headline promises sizzling stocks to buy now, but what precisely is the definition of “sizzling”?
Is it stocks whose share prices have jumped by double-digit percentages year to date? Or is it companies that analysts believe will grow revenue and/or profits by double digits over the next year or two? Everybody’s definition is different.
To come up with my list of sizzling stocks to buy now, I’ve found three companies in the S&P Composite 1500 whose share price is up by more than 10% YTD and whose revenue and/or earnings are forecast to increase by double-digit percentages this year and preferably next year as well.
Below are three high-potential stocks for the second half of the year.
| MAR | Marriott International | $169.09 |
| SWAV | Shockwave Medical | $276.14 |
| BKNG | Booking Holdings | $2,528.77 |
Marriott International (MAR)
Marriott International (NASDAQ:MAR) is up 13.6% YTD, outpacing the S&P 500’s 9.5% advance.
On the top line, analysts expect the asset-light hotel management company to grow its revenue 13% this year to $23.5 billion. And they are forecasting a 4% increase in sales in 2024.
Where Marriott is really expected to shine, though, is on the bottom line. In 2023, analysts are calling for $8.36 a share in earnings, up 25% from a year ago. In 2024, it’s projected to earn $9.11 a share, 9% higher than in 2023. Considering the company lost 82 cents a share on a GAAP basis in 2020 after earning $3.80 a share in 2019, before the pandemic, Marriott’s business is humming.
In early May, Marriott reported its results for the first quarter of 2023. Its comparable systemwide constant dollar revenue per available room (RevPAR) increased by 34.3% worldwide in the quarter — 25.6% for the U.S. and Canada and 63.1% internationally — while adjusted earnings per share (EPS) of $2.09 were 67% higher than in Q1 2022.
Marriott has more than 500,000 rooms worldwide in its pipeline still to be built. Approximately 200,000 were in construction at the end of the first quarter.
“We are off to a great start in 2023,” said Chief Executive Officer (CEO) Anthony Capuano. “First quarter worldwide RevPAR grew 34 percent year over year, with meaningful gains in both occupancy and average daily rate. International markets were particularly robust, with RevPAR growth of 63 percent. The lifting of travel restrictions throughout Asia Pacific, particularly in Greater China, significantly boosted first quarter demand in the region.”
Business is more than reasonable, making MAR one of the top mid-year growth stocks.
Shockwave Medical (SWAV)
Shockwave Medical (NASDAQ:SWAV) develops medical products to treat complex calcified cardiovascular disease. As a result, its products are in high demand. The stock is up 34% so far this year and more than 60% over the past 12 months.
Analysts are calling for revenue growth of nearly 46% this year and another 25% next year. And while EPS is forecast to decline this year from $5.71 to $3.91, it is expected to increase by 26% in 2024 to $4.93.
The company reported Q1 results in early May. Revenue jumped 72% year over year to $161.1 million due to higher volumes for its existing catheter sales. In addition, management announced the full U.S. commercial availability of its Shockwave L6 Peripheral IVL Catheter. The catheter expands its line of intravascular lithotripsy catheters.
On the bottom line, first-quarter net income rose 170% from a year ago to $39.1 million. With a healthy 24.7% operating margin, it’s no wonder shares are outperforming.
Speculation suggests Boston Scientific (NYSE:BSX) might be interested in acquiring Shockwave, and although it wouldn’t come cheap, analysts say it would be a good fit.
Shockwave is a “high-quality asset and trades at a premium valuation to its MedTech peers,” at around 14.5 times its enterprise value divided by sales, wrote BTIG analysts Marie Thibault and Sam Eiber in a note last month. Still, buying Shockwave would strengthen Boston Scientific’s position in the cardiovascular device market and be “a formidable response” to Abbott Labs’ pending acquisition of Cardiovascular Systems, they added.
Acquisition or not, SWAV shareholders look like they’ll continue to win.
Booking Holdings (BKNG)
Booking Holdings (NASDAQ:BKNG) reported healthy first-quarter results in early May. The world’s leading online travel and related services provider is benefiting from strong travel demand.
“We saw a strong start to the year with first quarter room nights and gross bookings reaching our highest quarterly levels ever and both metrics surpassing our previous expectations,” said CEO Glenn Fogel.
While revenue of $3.78 billion was only $10 million higher than the consensus estimate, it was 40% higher than a year earlier. On the bottom line, adjusted EPS of $11.60 came in 99 cents higher than the consensus estimate and 197% higher than a year earlier.
In the company’s Q4 2022 conference call, management said it expects to deliver record EBITDA in 2023 on improving margins. For their part, analysts are calling for revenue growth of nearly 21% this year and nearly 12% next year. Meanwhile, earnings are forecast to increase 38% in 2023 to $137.38 per share and 19% to $163.44 in 2024.
While BKNG stock is up more than 25% YTD, its share price has stalled since announcing earnings in early May. This gives investors a chance to buy the dip in one of the best growth stocks for the second half of 2023.
On the date of publication, Will Ashworth did not have (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.
