Growth stocks are where the real money is made in the market. That’s especially true for investors that can identify those with the potential to deliver substantial profits now or in the future. The high-flying companies that capture Wall Street’s imagination tend to be growth companies with extremely strong earnings. As a result, analysts and investors are often willing to value certain growth stocks based on financial projections and growth estimates five, 10, or even 15 years down the road.
In my view, some under-the-radar growth stocks can break out over the next few years and triple in value. While some companies may still be facing temporary headwinds, others have been steadily improving their financials without being adequately rewarded by the market, which has been laser-focused on AI, SaaS, and semiconductor stocks as of late. However, once the spotlight shifts, more overlooked growth stocks could rapidly climb to much higher valuations.
ACM Research (ACMR)
The semiconductor industry has been on an absolute tear, and hype levels are understandably high all around. However, I believe ACM Research (NASDAQ:ACMR) remains an overlooked gem that could still triple over the next 3 years after already delivering nearly 200% returns since my buy call last June.
My optimism is driven by massive AI computing demand going forward. With advanced models like OpenAI’s Sora requiring unfathomable data and computing power for text-to-video generation, chip demand for training will skyrocket. While this boost will lift many semiconductor stocks higher, and I don’t advise concentrating solely on one stock, ACM presents compelling value compared to pricier peers. Shares trade at just 20-times forward earnings and 2.5-times sales, despite robust growth.
Of course, ACM won’t match Nvidia’s (NASDAQ:NVDA) pace, but 25% projected annual earnings per share growth and the potential to eclipse $1.2 billion in sales by 2027 make triple-digit upside in 3 years plausible. Crucially, ACM has routinely exceeded estimates, including beating Q4 EPS projections by 18% and revenue by 4.1% last year. Since 2020, the company has surpassed all but one quarterly earnings estimate and only missed the revenue mark three times (by less than $1 million).
If management can meet or exceed guidance while addressing this massive market, ACMR stock should have no trouble hitting new highs. Semiconductor stocks remain in favor, and this overlooked name still has enormous room to run.
Grab Holdings (GRAB)
Grab Holdings (NASDAQ:GRAB) has fallen on hard times. The company’s stock price has languished near $3 per share for nearly two years, but I believe a breakout is near as the company has recently become profitable.
Grab recently achieved a major milestone by expanding positive adjusted EBITDA and overall profits in Q4 2023, even while sustaining 30% year-over-year revenue growth. With over $5 billion in cash reserves, Grab appears well-equipped to fund ambitious expansion efforts across Southeast Asia for years to come.
Although near-term profitability may fluctuate, the company’s long-term growth narrative looks highly-compelling for this dominant regional platform. Wall Street analysts forecast Grab’s top line rising at double-digit percentage rates annually through 2030 as the adoption of digital services continues surging across the region.
Additionally, Grab’s earnings per share are projected to increase 10-fold from just 6 cents in 2025 all the way to 60 cents in 2030. Given these growth drivers, Grab’s current valuation around 5-times 2030 forecast earnings could prove dramatically undervalued if the company maintains its strong market position.
NanoXplore (NNXPF)
With graphene demand surging across a number of industries, NanoXplore (OTCMTKS:NNXPF) looks poised to capitalize as a leading graphene supplier.
Graphene’s exceptional electrical properties and strength as a material 200-times harder than steel and 5-times lighter than aluminum make it highly-coveted. Fortune Business Insights expects the global graphene market to surge from $432.7 million in 2023 to almost $3 billion by 2030, representing a 32% compounded annual growth rate (CAGR).
With capacity expansions boosting production, NanoXplore seems capable of riding this graphene megatrend.
Despite strong fundamentals, NNXPF stock has pulled back to depressed levels near $2 per share after peaking above the $6 level in 2021. With the huge graphene opportunity still in its early innings, NanoXplore could challenge past highs and go much further as markets re-rate its potential. If this company emerges as a dominant graphene supplier in a market growing 30% annually, its future certainly looks bright.
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.
