If investors can spot high-quality new growth stocks early, the investment has the potential to deliver multibagger returns. While blue-chip stocks are a fortress for the portfolio, growth stocks offer millionaire-maker potential.
Importantly, when a story is in the limelight, valuations might already be stretched. Therefore, it’s essential to dig deeper and find under-the-radar ideas that are undervalued. One source of selecting undiscovered growth stocks is the most recent initial public offering (IPO) listings.
And, the IPO market for Q1 of 2024 has been robust. Forty-six IPOs have raised total proceeds of $8.9 billion. With dozens of new listings, some new growth stocks to buy and hold look promising.
These growth stocks are likely to deliver 10-bagger returns by the end of the decade. I would like to think conservatively and therefore the stories discussed might surprise in terms of returns. The important thing is to hold with patience for the long term. Let’s discuss the reasons to be bullish on these ideas.
Loar Holdings (LOAR)
Loar Holdings (NYSE:LOAR) has been trending higher since listing. As compared to the IPO price, LOAR stock has almost doubled. It’s still a good time to buy with the aerospace and defense company having ample scope for growth in the coming years.
For Q1 of 2024, Loar Holdings reported revenue growth of 23.7% to $91.8 million. Also, the company reported a healthy adjusted EBITDA margin of 36%. Loar Holdings has provided a healthy sales guidance of $370 million for the year.
Notably, the company has used $250 million of IPO proceeds to repay debt. With higher financial flexibility, Loar Holdings is positioned to “fund future organic and inorganic growth.”
Therefore, growth acceleration seems likely, and this view is backed by positive tailwinds for the defense sector. Further, LOAR expects increasing demand for products supplied to the commercial aftermarket. Hence, it’s not surprising that LOAR stock has remained in an uptrend.
Ibotta (IBTA)
Ibotta (NYSE:IBTA) is another interesting IPO that promises to be a long term value creator. As a matter of fact, IBTA stock has already caught the attention of multiple Wall Street analysts. I expect a meaningful rally in the coming quarters.
The company’s offering, “Ibotta Performance Network,” allows consumer goods brands to deliver digital promotions to consumers. Ibotta’s clients includes Walmart (NYSE:WMT), Coca-Cola (NYSE:KO) and PepsiCo (NASDAQ:PEP). These are just few names among the 850 clients.
For 2023, Ibotta reported revenue growth of 52% on a year-over-year (YOY) to $320 million. And, the company reported a healthy EBITDA margin of 26%. IBTA has a potential addressable market worth $200 billion. This provides ample headroom for growth.
Finally, Ibotta derives 100% of revenue from the U.S. It’s likely that the company will expand its service offering to international markets. This is a possible catalyst for sustained growth.
PACS Group (PACS)
PACS Group (NYSE:PACS) is a provider of skilled nursing and assisted living facilities in the U.S. From an IPO price of $21, the stock has trended higher by 43% to current levels of $30. However, valuations remain attractive at a forward price-earnings (P/E) ratio of 20.5. I expect multibagger returns considering the business growth potential.
For Q1 of 2024, PACS Group reported healthy revenue growth of 31.9% on a year-over-year (YOY) to $934.7 million. Further, the company has guided for full-year revenue of $3.7 billion with an adjusted EBITDA of $356 million.
Currently, PACS Group has 218 facilities (including senior living) across nine states. Thus, ample scope for entrance into new states abounds. This is likely to ensure that revenue growth remains robust.
Finally, the company’s skilled nursing facility (post-acute care) has a cost per day of $550. For a hospital, the cost per day is $2,914. Similarly, the inpatient rehabilitation facility has a cost per day of $1,850. Therefore, PACS Group has a clear differentiating affordability factor that makes it attractive.
On the date of publication, Faisal Humayun 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.
