Amid rampant market hype, many high-profile companies with solid growth rates are seeing strong uptake from investors. But that’s not to say all growth stocks are seeing the same sort of enthusiasm from investors. There are plenty of overlooked growth stocks with robust fundamentals that go unnoticed, presenting lucrative investment prospects across various sectors.
With a strong bull market appearing to be underway, many investors are looking for the best opportunities to buy into this upside. The thing is, finding companies with the right mix of long-term growth potential and undervaluation (or a relative lack of coverage from Wall Street) is hard to do. The following three companies are ones I’d put in this bucket.
Without further ado, let’s dive into three growth stocks I think are overlooked and should be considered as long-term buys for investors oriented toward growth.
Zoom Video (ZM)
As the pandemic’s ultimate star in the video conferencing space, Zoom Video (NASDAQ:ZM) has certainly become a hot name in the sector. The company’s Q4 2023 results highlighted excellent growth despite post-pandemic headwinds, with the company seeing significant profitability growth that’s attracting growth and value investors alike. Now trading at 29-times earnings, ZM stock is widely viewed as a value play. The shift towards enterprise revenue hints at potential accelerated growth.
Indeed, I’m of the view that profitability growth is going to matter more than revenue growth during the next phase of this bull market cycle. Investors want to see real returns on their investment. In this regard, Zoom provides plenty to be excited about.
We’ll find out more about how Zoom’s top and bottom line growth is proceeding when it reports its Q1 2025 earnings on May 20. The market is expecting to see a $1.125 billion revenue, and earnings per share to come in within the range of $1.18 to $2. Q1 will most likely see some sustained demand for Zoom’s products such as Webinars, Rooms, and Phones. Introducing Compliance Manager and Swoogo’s hybrid events offering will further expand the company’s solutions and attract enterprise customers.
Matterport (MTTR)
Matterport (NASDAQ:MTTR) is an intriguing potential growth stock for investors to consider. The company recently launched a platform aimed at enterprise clients looking to make their emissions reporting more robust. This platform measures emissions saved through its digital twin platform.
Developed with carbon accounting experts, these reports help clients grasp emissions reduced by remote collaboration instead of onsite inspections. As corporations prioritize climate responsibility, they commit to UN Sustainable Development Goals and set science-based targets for emission reduction.
Matterport’s 3D digital twins streamline tasks like tours and inspections, cutting Scope 3 emissions. They reduce costs and boost productivity for businesses with large property portfolios, offering virtual collaboration.
Moreover, its new reporting quantifies the sustainability impact of digital twins, aiding enterprises in making eco-conscious property decisions. A Fortune 100 client praised the concise avoided emissions report for showcasing sustainability benefits. I think as this market grows, Matterport’s market capitalization should as well over time.
Oracle (ORCL)
Oracle (NASDAQ:ORCL) stands out in the software industry with its essential database software and swiftly expanding cloud computing divisions. Embracing artificial intelligence trends, Oracle has experienced rapid growth. In mid-2024, demand for its Gen2 AI infrastructure surpassed supply despite extensive data center expansions. Its leading position in database software and booming AI-driven cloud services attract significant investor attention.
According to reports from The Information, Elon Musk’s AI venture, xAI, is engaging in talks with Oracle about a $10 billion cloud contract. Unsurprisingly, Oracle shares surged on the news. Sources revealed that if finalized, xAI could emerge as one of Oracle’s major clients. Established a year ago, xAI aspires to rival OpenAI in extensive language model development for generative AI applications. Oracle’s stock soared over 3% to $119.89, hitting $122 post-news before a minor pullback.
The deal signals Oracle Cloud Infrastructure’s triumph over rivals like Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT), seen as a boost for Oracle amid rising demand for generative AI. Despite a sales slowdown last year, Oracle’s stock rebounded after a robust February quarter report, with a 49% surge in cloud infrastructure revenue to $1.9 billion. This isn’t the first collaboration between Musk’s startup and Oracle. The companies previously worked together to supply high-powered computing chips from Nvidia (NASDAQ:NVDA) to support xAI. Do yourself a favor and grab this and the rest of these overlooked growth stocks.
On the date of publication, Chris MacDonald 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.
