Yahoo Finance Zacks Investment Ideas feature highlights: Alphabet, Enova and Nucor
For Immediate Release
Chicago, IL – July 25, 2023 – Today, Zacks Investment Ideas feature highlights Alphabet GOOGL, Enova International ENVA and Nucor NUE.
3 Top-Rated Growth Stocks to Buy as Earnings Approach
This week’s earnings lineup will highlight a number of top-rated stocks that are standing out in terms of growth. Growth is certainly something Wall Street and investors are looking for as inflationary concerns begin to ease and market sentiment remains high.
Here are three of these stocks that can soothe investors' sentiment in terms of growth, and now appears to be a good time to buy going into their second-quarter reports on Tuesday, July 25.
Alphabet
We’ll start with a well-known name in Alphabet as its stock currently sports a Zacks Rank #2 (Buy) and an “A” Zacks Style Scores grade for Growth.
Of course, Alphabet is intriguing in terms of its Artificial Intelligence (AI) capabilities with Bard, a chatbot that aims to rival the popular ChatGPT. The potential for AI to boost other areas of Alphabet’s businesses like Google Cloud and advertising revenue is promising as well.
Alphabet is expected to have posted strong second-quarter growth with earnings projected to rise 9% from a year ago at $1.32 per share and sales up 5% to $60.24 billion. Notably, the Zacks Expected Surprise Prediction (ESP) also indicates Alphabet could beat earnings expectations with the Most Accurate Estimate having Q2 EPS at $1.35 and 2% above the Zacks Consensus.
Alphabet’s annual earnings are now forecasted to jump 18% this year and climb another 17% in fiscal 2024 at $6.31 per share. Total sales are projected to rise 6% in FY23 and jump another 10% in FY24 to $274.28 billion.
More intriguing is that investors aren’t paying a hefty premium for Alphabet’s growth at the moment. Trading at $121 a share Alphabet stock trades at 22.2X forward earnings which is slightly beneath its industry average of 24.2X and near the S&P 500’s 21.3X.
Enova International
Lesser known but very glaring at the moment is Enova International’s stock which boasts a Zacks Rank #1 (Strong Buy) and “B” Style Scores grade for Growth.
Enova is expecting strong quarterly growth as a provider of online financial services, offering loans to customers in the United States, U.K., Australia, and Canada. Stabilizing interest rates should be a catalyst with Enova’s Q2 earnings expected to be up 3% YoY at $1.69 per share. The Zacks ESP indicates Enova should reach its Q2 earnings expectations and sales are forecasted to jump 19% from the prior-year quarter at $485.55 million.
Plus, Enova’s annual earnings are forecasted to rise 11% in fiscal 2023 and jump another 15% in FY24 at $8.73 per share with estimates nicely up over the last 60 days. On the top line, sales are expected to climb 16% this year and rise another 11% in FY24 to $2.23 billion.
The rising earnings estimate revisions largely attribute to Enova’s Zack Rank #1 (Strong Buy) and are a great sign with ENVA shares trading at $56 and just 7.3X forward earnings. This is well below the benchmark and slightly beneath Enova’s industry average of 7.6X.
Making a stronger case for consideration is that Enova stock trades 86% below its high of 53.8X over the last five years and closer to the median of 6.5X.
Nucor
Somewhat of a hidden gem this earnings season is leading steel producer Nucor, with its stock sporting a Zacks Rank #2 (Buy) and “B” Style Scores grade for Growth.
Nucor’s Q2 earnings are expected to remain robust at $5.59 per share but have come back to reality after an extremely tough-to-compete-against quarter that saw EPS at $9.67 a year ago. Second-quarter sales are forecasted at $9.73 billion compared to $11.79 billion in Q2 2022.
With that being said, the Zacks ESP indicates Nucor could beat earnings expectations with the Most Accurate Estimate having Q2 EPS at $5.61 and slightly above the Zacks Consensus.
Steel prices have started to drop after skyrocketing amid higher inflation but Nucor’s top and bottom lines remain above historic levels despite a decline naturally expected. Fiscal 2023 earnings are now projected at $18.35 per share and then down to $12.17 a share in FY24.
However, FY24 EPS projections would still represent a very stellar 264% growth over the last five years with 2020 earnings at $3.34 per share. Better still, Nucor stock trades at $166 and 8.9X forward earnings which is near the industry average of 7.8X and attractively beneath the S&P 500’s 21.3X. Nucor stock also trades 78% below its high of 41.8X over the last five years and at a slight discount to the median of 9.3X.
Bottom Line
In addition to their attractive growth stories, Alphabet, Enova International, and Nucor’s price-to-earnings valuations support more upside in their stocks. Now appears to be a good time to buy with these companies expected to reach or beat their Q2 earnings expectations and this accompanied with favorable guidance would be a strong catalyst for a rally.
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Nucor Corporation (NUE) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Enova International, Inc. (ENVA) : Free Stock Analysis Report
