Finding stocks ready for a comeback is crucial for investors looking for growth and value in today’s dynamic market environment.
The first one stands out due to its substantial increase in transaction volume and growing market penetration. The company exhibits operational efficiency and a strong foothold in the transaction and payment processing services industry, with a rise in transaction margin dollars and a steady development in total payment volume (TPV).
Meanwhile, thanks to its worldwide development and strategic investments, the second one has become a contender in the streaming market and a symbol of resilience. By focusing on increasing the profitability of its streaming division, the company has generated positive EBITDA and a notable increase in subscriber-related revenue, showcasing its ability to adapt and thrive in a competitive market.
Lastly, the third one stands out as a strong brand with a solid worldwide presence and creative bent. Despite obstacles, the business continues to dominate the coffee sector, exhibiting great store development skills and utilizing digital efforts to boost consumer interaction and sales.
Each of these companies presents unique strengths and opportunities.
Comeback Stocks: PayPal (PYPL)
In Q1 2024, PayPal’s (NASDAQ:PYPL) transaction margin dollars climbed by 4% to $3.5 billion. This rise in transaction margin dollars indicates PayPal’s increased profitability and operational effectiveness. This implies that PayPal keeps or increases its transaction volumes while controlling costs. PayPal has 220 million monthly active accounts as of the end of Q1 out of 427 million total active accounts.
Certainly, the increase in active accounts is a sign of PayPal’s capacity to attract and retain users. The rise in monthly active accounts also shows strong user engagement, which is important for boosting transaction volumes and revenue growth.
Additionally, in Q1, TPV increased by 14% on a spot and currency-neutral basis, reaching $403.9 billion. The solid increase in TPV indicates PayPal’s growing market share and booming use of its payment services. This trend reflects consumers’ and businesses’ usage of PayPal’s transaction processing platform.
Lastly, the non-GAAP operating margin increased by 0.84% to 18.2%, signaling that PayPal is making more money from its sales.
Warner Bros. Discovery (WBD)
Warner Bros. Discovery’s (NASDAQ:WBD) direct-to-consumer (D2C) segment, which includes the HBO Max platform, is growing, providing a substantial growth opportunity for the company’s streaming division. Warner Bros. Discovery’s D2C division recorded a positive EBITDA of almost $100 million, indicating a solid yearly gain.
Additionally, the boost in subscriber-related revenue coincided with increased distribution and advertising income in H2 2023. The main drivers of this development were more pricing, a rise in ad-lite subscribers, and more interaction on the HBO Max platform.
Furthermore, Warner Bros. Discovery’s plan for global development is a major factor in the growth of the streaming industry, as in Q4, the company added over 1 million new members. This demonstrates the company’s streaming content’s attractiveness on a worldwide scale and its capacity to gain market share in various geographical areas.
Moreover, boosting subscriber growth and expanding market penetration depends heavily on Warner Bros. Discovery’s initiatives to improve the streaming product experience and content offering through local relaunches and new market introductions. Finally, the company’s objective of deriving $1 billion in D2C sector EBITDA by 2025 aligns with these strategies.
Starbucks (SBUX)
Starbucks (NASDAQ:SBUX) continues to have a strong lead in the global coffee business and substantial brand equity despite difficulties in Q2 2024. The business has been at the forefront of the sector for more than 50 years, earning a solid reputation.
Moreover, Starbucks may design and construct nearly 3,000 new locations in 2024, demonstrating the company’s strong retail development capabilities. The company’s store openings still realize strong unit economics, including excellent returns on investment (ROI) and average unit volumes (AUVs). Additionally, significant store development in developing nations like Korea, Indonesia, and India is part of the global expansion activities, which add to the portfolio’s diversity and size.
Furthermore, Starbucks uses digital advancement. It concentrates on improving consumer interaction via smartphone ordering and the Starbucks Rewards program. With 32.8 million active members, the Starbucks Rewards program has a sizable U.S. membership base, a 6% uplift in members year-over-year.
Finally, the number of mobile order and pay (MOP) transactions in the U.S. hit a record high. This accounts for 31% of all transactions and indicates the efficacy of digital initiatives in boosting sales.
As of this writing, Yiannis Zourmpanos held long positions in PYPL, WBD and SBUX. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
