3 Market-Beating Growth Stocks

Now that we’ve made up more than half of the coronavirus selloff and are, hopefully, in the early stages of re-opening the economy; it’s time to talk about growth again!

Even with the gains made over the past month or so, stocks still have a lot of ground to recover before getting back to its pre-virus levels. But of course, not every company is on the road to new highs again.

Our Market Beating Growth Stocks screen finds companies with a Zacks Rank #1 (Strong Buy) status that’s projected for EPS growth of 20% or greater. These are stocks poised for big things as the economy gets back on its feet. Learn about three names that recently passed the criteria:

Nautilus (NLS)

There’s plenty of things about going to gym that we’re actually not missing during this economic shutdown. Such as wet (or sticky) handles on the equipment… and that wonderful locker room smell that can waft through half the room during busy hours. Or how about that guy right next to you who has to grunt after every rep even though he’s barely lifting any weight!

Well, Nautilus (NLS) has got you covered. You’ve undoubtedly heard of this company’s Bowflex® machines from their commercials, but many probably considered it a luxury while they had that gym membership. These days, though, it could be considered a necessity, not only to stay in shape during this disruption but also to burn off some of that anxiety and frustration from being locked up.

Shares of this fitness products company have soared approximately 330% since the coronavirus lows on March 23.

Earlier this week, NLS reported first-quarter earnings per share of 8 cents, which trounced last year’s loss of 29 cents while also beating the Zacks Consensus Estimate by nearly 215%. Revenue of $93.7 million improved 11% from last year and inched past our expectation by .02%.

The company also had its first positive same-store sales since late 2018 on strong results for its products.

The past 30 days have seen a sharp improvement in earnings estimates. We still expect a loss of 11 cents for 2020, but that has been significantly narrowed from a loss of 42 cents. The loss for next year is now at 6 cents, which has improved from a loss of 30 cents a month ago while also cutting the deficit from the previous year in half.

We’ve been hearing a lot about a “new normal” and how people won’t be completely returning to the old ways even when the shutdown ends. In other words, we’re learning that there are lots of things that can be handled just as well from home with much less hassle. Exercising will probably be one of those things, which bodes well for NLS moving forward.

Vertex Pharmaceuticals (VRTX)

Not many people are thinking about cystic fibrosis (CF) right now… unless of course you or someone you care about is inflicted with this disease. It’s a good reminder that there are millions of people out there who have more to worry about than just the coronavirus.

Fortunately, Vertex Pharmaceuticals (VRTX) is always thinking about people with CF, as this rare, life-threatening disease is the main focus for this global biotechnology company. Its big product right now is Trikafta, which is crucial to its long-term growth as it has the potential to treat up to 90% of CF patients.

The drug brought in revenue of $895 million in the first quarter out of $1.52 billion in total revenue. The result beat the Zacks Consensus Estimate of $1.3 billion.

In fact, thanks in large part to Trikafta, VRTX raised its CF product revenues forecast for 2020 to between $5.3 billion and $5.6 billion. The earlier forecast was $5.1 billion to $5.3 billion. This upgrade was possible because the coronavirus outbreak has not impacted the company’s supply chain for approved medicines.

The bottom line may be even more impressive, especially for a company in the biotech field. VRTX has beaten the Zacks Consensus Estimate for 14 straight quarters. Most recently, first-quarter earnings per share of $2.56 improved more than 120% from last year and topped our expectations by nearly 40%.

The company now has a four-quarter average beat of 27.65%.

Over the past 30 days, earnings estimates for this year have jumped 14.7% to $8.80. Next year’s outlook is up 7.3% in that time to $10.31, which also suggests year-over-year improvement of more than 17%.

Shares of VRTX are up nearly 34% from the coronavirus low on March 23.

Tradeweb Markets (TW)

Who would’ve thought that our financial markets would be the biggest “stay-at-home” industry in the country?

Well, Tradeweb Markets (TW) did! This operator of electronic marketplaces for rates, credit, equities and money markets was poised to operate – and even prosper – during this pandemic shutdown and the “new normal” that it will bring moving forward.

It has been experiencing record trading volumes, including average daily volume (ADV) of $1 Trillion for March, which was an increase of 41.5% from last year during a period when the market was experiencing the quickest plunge into a bear market in history.

The ADV for April was ‘only’ $763.4 billion as volumes thankfully stabilized. However, it was still the best April ever with an increase of 14.6% from last year.

Such trading volume led to a strong first quarter performance, including earnings per share of 37 cents that beat the Zacks Consensus Estimate by 5.7%.

TW has beaten every quarter since its well-regarded IPO from a year ago. That’s five straight positive surprises.

The quarter’s ADV jumped 39% to $897.8 billion, while quarterly gross revenues increased 25.6% to $234.6 million.

Over the past 60 days, earnings estimates for this year have jumped 8.5% to $1.28. Next year is up 5.4% in that time to $1.36, which also suggests year-over-year growth of more than 6%.

Shares of TW are up 51% since that March 23 coronavirus low as electronic markets are accelerating in this new environment. And its not likely to end when the economy fully opens up. This is one of those spaces that is likely forever changed from this pandemic.

As TW CEO Lee Olesky stated in the Q1 report: “For many, and we hear this all the time, there’s simply no going back to the old way of doing things.”

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Vertex Pharmaceuticals Incorporated (VRTX) : Free Stock Analysis Report
 
Tradeweb Markets Inc (TW) : Free Stock Analysis Report
 
Nautilus Group Inc The (NLS) : Free Stock Analysis Report
 
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