As we move toward the end of the second quarter, it’s time to start thinking about earnings. Looking at the quarter, analysts forecast 8% revenue growth, which could rise to 11% next year. This is a pink picture, but it’s not sure. GDP fell by about 1.5% in the first quarter, and some estimates show a 0% increase in the second quarter. Such results may meet the technical definition of a recession – and a recession is unlikely to be the usual environment for finding strong income growth.
Looking at the current situation, Jim Cramer, a well-known presenter of CNBC’s ‘Mad Money’ program, believes that investors should wait for the market to fall after earnings, and writes: “And then more companies will hit us with negative initial announcements. That’s when we will have a bottom that can be traded like this, but invested.”
Meanwhile, stocks have already been pushed down sharply by today’s bear market. use TipRanks database, we have identified three stocks that have fallen at least 50% this year – but Street analysts still rate them as Strong Buy. Despite the difficult market environment, each offers three-digit growth potential. Let’s take a closer look.
Remitly Global (TRUST)
We will start with Remitly Global, a financial services company with an interesting niche. Remitly focuses on facilitating international transfer payments, ensuring the security of senders and recipients, and ensuring that transactions are both secure and accurate. The service has been intensively used by immigrant communities around the world, who have historically used remittances to send money home. Remitly operates in 160 countries and builds its services on lower-paid mobile applications than traditional banks.
Remitly has been on the public market for less than a year, holding an IPO in September 2021. The company’s stock market debut went well, shares opened higher than initially expected, and sales raised about $ 520 million in total capital. but stocks have fallen in price since then. RELY shares fell 56% during the year.
Although stocks have fallen, Remitly’s performance remains strong. Revenues in the first quarter of 2016 amounted to $ 136 million, an increase of 49% year on year. The strong revenue growth stems from a 42% annual increase in active customers from 2.1 million to 3 million and a 43% annual increase in shipments from $ 4.3 billion to $ 6.1 billion. The company made a slight positive adjustment to its full-year revenue management for 2022, representing an average annual increase of ~ 34% from $ 610 million to $ 615 million. On a negative note, the company’s profit fell as net losses deepened from $ 7.8 million to $ 23.3 million.
JMP analysts David Scharf Evaluating the company’s latest results as purely positive, he writes: “The strong impulse that ended 2021 entered the first quarter of 2022 and accelerated. The financial results of the first quarter were almost in line with our forecast. Metrics (active customers, shipping volume, and customer volume) exceeded our expectations and were key drivers of slight growth up to full annual revenue management.
“Despite a sharp decline in technology and payment inventory estimates and growing macro uncertainty amid fears of a global recession, RELY’s 30% + revenue growth forecast reflects the global digital backwaters it enjoys and the long runway of corridor expansion.” analyst added.
Overall, Scharf believes this is a worthwhile stock to keep. The analyst estimates that RELY shares Superior Performance (i.e. Buy) and that its $ 22 price target offers ~ 140% solid growth potential. (To follow Sharf’s record, Click here)
Remitly also received a Strong Buy consensus rating from Wall Street on the basis of the last 4 positive reviews. The stock is trading at $ 9.15, with an average price target of $ 18.75, an increase of ~ 105% from that level. (See the forecast for RELY shares on TipRanks)
LendingTree, Inc. (TREE)
The next we will look at is Lending Tree, an online loan broker that connects downstream shareholders and borrowers through an online platform. Borrowers can follow several credit options at the same time, giving them additional convenience when looking for terms on everything from credit cards to insurance, loans to deposit accounts. The Lending Tree in Charlotte generated just over $ 1.09 billion in revenue last year, up from $ 910 million the previous year.
The Lending Tree for the 1st quarter of 2016 reported $ 283.18 million, a slight gain of 4% over the previous quarter. Earnings were negative for the quarter, with a GAAP loss of 84 cents per share. This was a reversal of net profit reported in the 4th quarter of 2018 and the 1st quarter of the 21st quarter, and the deepest net loss since the 20th quarter.
An interesting example is shown when looking at the details of the Lending Tree’s profit release. The company’s Home segment showed a 20% year-on-year decline, while mortgage product revenues fell 33%. Income in the insurance segment also decreased by 8% from the first quarter of 21. At the same time, the consumer credit business has risen; Credit card revenues increased by 69% and individual loans by 137%. TREE shares have fallen 55% so far this year.
This example caught the attention of a 5-star analyst at Truist Youssef Squali. Describing the situation, Squali wrote: “Despite the fact that mortgages and refineries remain under pressure in an environment of rising interest rates and inflation has raised insurance premiums, TREE 2Q has not seen the same negative impact on consumer business. The company expects an annual revenue growth of ‘about 40%’ in 2Q, which is in line with our previous expectations after earning 1Q. We believe this underscores TREE’s continued strength in vertical areas such as SMBs and individual loans (TREE’s highest margin business), as well as credit cards, given the lack of incentive checks and higher consumer spending levels this year. ”
“These trends are likely to continue for several more quarters as rates continue to rise, but easier compositions, which began in the fourth quarter of 2016, will accelerate aggregate growth again in 2023. Meanwhile, zero expectations, silenced estimates and the asset must maintain repurchase prices. Stock is checked, ”the shark concluded.
This reinforces the analyst’s view that TREE is a stock to “buy” and a target of $ 130. At current levels, this target offers an increase of ~ 137% for next year. (To watch Squali’s record, Click here)
Overall, TREE has selected 7 recent analytical reviews for the Strong Buy Consensus rating with 6 Buy and 1 Hold in recent weeks. The stock’s average price target of $ 137.50 indicates that it is up 150% from its current trading price of $ 54.87. (See the forecast for TREE shares in TipRanks)
Timely Finance Corporation (OPRT)
We will end with another online finance company. It uses artificial intelligence to strengthen Oport’s digital banking platform and offers affordable financial services to about 1.7 million members. Oport’s clients use the platform to access a full range of banking services, including savings accounts and investment services – but especially short-term personal loans and borrowings. Sub-prime borrowers often have to resort to high-risk services such as payday loans, but Oport offers a number of alternatives. These include individual loans of $ 300-10,000 with a maturity of 1 to 4 years and credit cards with a limit of $ 300-1000.
Late last year, it took action to expand its footprint and customer base by acquiring Digit, Oport’s online non-banking platform. The apple was a cash and stock deal worth about $ 112.6 million.
The past year has generally seen a boom in consumption, with Oport benefiting for four consecutive quarters with consistently rising revenues. The most recent quarterly report put $ 214.72 million in the first place in the first quarter of 2016, the best performance in more than two years, up 59% year-on-year. The total number of active members of 1.7 million people represented an annual growth of 48%. Earnings also rose $ 1.58 per share on a GAAP-adjusted basis, up 285% year-on-year from 41 cents in the previous quarter.
Despite these strong results and record EPS, Oport’s shares have fallen 58% so far this year. Stock losses did not bother the BTIG analyst Mark Palmerwrites: “We believe that the company’s long-term growth and profitability prospects have been strengthened by the benefits and reversal of its acquisition of Digit, its partnership with MetaBank and its focus on digital strategy. created an attractive buying opportunity in the company’s stock price. “
To that end, Palmer is assessing a Buy Shares stock with a price target of $ 27, indicating OPRT’s confidence in a strong 218% rise in the coming months. (To watch Palmer’s record, Click here)
Approves Wall Street Aport, unanimously supports Strong Buy’s consensus rating on the stock, as evidenced by 5 positive analysts. The stock is priced at $ 8.49, with an average price target of $ 25.50, an annual increase of ~ 197%. (See ORPT shares forecast on TipRanks)
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Refusal: The views expressed in this article are those of selected analysts. The content is intended for informational purposes only. It is very important to do your own analysis before making any investment.
