Growth stocks that trade under $50 per share usually have medium-sized underlying businesses. These tend to be up-and-coming companies that are looking to land contracts and accelerate their growth. Their market caps are often below $10 billion, and they have high top-line growth. Such are the companies I’ve highlighted below.
Now, companies with such characteristics have not done so well in the current market. That goes double for those that are not delivering solid profits. I believe that’s exactly why you should look into these growth stocks before the market cycle shifts and their businesses start delivering both growth and profits. These growth stocks have impressive profitability potential long-term. That means these three growth stocks under $50 per share could very quickly move out of reach for many investors.
Let’s dive into why these stocks are worth considering right now.
Braze (BRZE)
Braze (NASDAQ:BRZE) provides a customer engagement platform that powers interactions between consumers and brands. The company’s Q1 revenue grew an impressive 33% year-over-year to $135.5 million. Non-GAAP operating margins also improved by over 800 basis points compared to last year. And importantly, the company produced about $19 million in operating cash flow.
Braze continues to win new customers, adding 58 this past quarter to reach 2,102. The important $500,000+ annual recurring revenue (ARR) customer cohort also grew nicely by 29% to 212. Notable new wins came from a diverse set of companies like Bauer Media, Bolt Technology, and Leonardo.ai. Key partnership expansions included Etsy (NASDAQ:ETSY), Lime, and Talkspace (NASDAQ:TALK).
The customer engagement space is enjoying strong tailwinds as organizations invest more in their service offerings as they engage in a fight for market share. Many companies in Braze’s competitive set sport lofty valuations. However, BRZE stock trades at around 7-times forward sales. That’s an elevated multiple, but still below many peers.
As Braze turns solidly profitable and expands earnings as expected, I believe the stock could deliver tasty upside from current levels. Management has navigated the recent volatility in the market well. And as the Braze teams balances its growth initiatives with improving efficiency, I think patient investors may be rewarded handsomely. Analysts see nearly 60% upside over the next 12 months alone.
Symbotic (SYM)
Symbotic (NASDAQ:SYM) is revolutionizing warehouse automation through AI-powered robotics. I believe the next AI wave will sweep through blue-collar industries. Symbotic is poised to ride this multi-year megatrend and tap into its nearly $1 trillion addressable market.
In Q2, Symbotic more than doubled its transfer depth capacity and increased bot density through advanced routing algorithms. The transition to a microservices architecture and integration of new AI chips is expected to make the platform a lot more efficient with time.
Moreover, Symbotic posted impressive Q2 results with earnings per share coming in at 32 cents (beating estimates by 29 cents), and revenue surging 59% year-over-year to $424.3 million. This top-line number exceeded expectations by nearly $11 million.
Plus, the company is expanding its reach with a second brakepack solution installation. Its GreenBox subsidiary is signing its first logistics-as-a-service customer, C&S Wholesale Grocers. As more companies recognize the long-term value of automating factories and processes, the company’s products could see explosive adoption in the coming years.
indie Semiconductor (INDI)
Speaking of chips, indie Semiconductor (NASDAQ:INDI) is a leading innovator in the autotech chip market. I believe this company is poised to capitalize on the explosive growth in AI and automation, particularly within the automotive sector. While global vehicle production faces some near-term headwinds, indie still delivered impressive 29% year-over-year revenue growth in Q1, albeit slightly below guidance.
The company’s cutting-edge solutions are clearly gaining traction. Recent design wins have accelerated across autonomous driving, user experience, and electrification applications. This positions indie for outsized growth in the second half and beyond as new program ramps kick in.
To be clear, the company did experience a significant miss in Q1 and continues to burn cash, for now. However, analysts expect indie to turn profitable next year. Importantly, earnings are projected to triple by 2026. Moreover, top line revenues are forecast to double from 2024 to 2026.
If these projections materialize, I anticipate indie’s valuation multiple will expand substantially in the coming years. At under $10 per share currently, the risk/reward upside for this stock looks highly compelling for long-term investors willing to ride out some near-term volatility.
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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
