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Don't Ignore These 3 Companies' Growth Trajectories
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There are many types of investing styles deployed within the market. Some investors prefer to target income, some prefer value, and some prefer to target growth.
Of course, those who gravitate toward the growth investing style commonly target technology companies, as their long-term potential is hard to ignore.
And as we’ve witnessed in 2023, technology stocks have finally found buyers following a brutal 2022.
Three stocks from the Zacks Computer and Technology sector – Airbnb (ABNB - Free Report) , Arista Networks (ANET - Free Report) , and MSCI Inc. (MSCI - Free Report) – are all expected to witness solid top and bottom line growth in their respective fiscal years.
Below is a chart illustrating the year-to-date performance of all three stocks, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at each one.
Airbnb
Airbnb is a leading platform for unique stays and experiences, providing a marketplace for connecting hosts and guests online or through mobile devices. Analysts have taken a bullish stance on the company’s earnings outlook, pushing ABNB into a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
It’s hard to ignore the company’s growth profile, with earnings forecasted to climb 21% in its current fiscal year (FY23) and a further 20% in FY24.
The projected earnings growth comes on top of forecasted year-over-year revenue upticks of 14.9% in FY23 and 15.3% in FY24.
Image Source: Zacks Investment Research
And for the cherry on top, Airbnb posted strong quarterly results in its latest release, exceeding the Zacks Consensus EPS Estimate by nearly 80% and reporting revenue 2% ahead of expectations.
The market liked the results, with ABNB shares gaining more than 13% in the following trading session.
Image Source: Zacks Investment Research
Arista Networks
Arista Networks provides cloud networking solutions for data centers and cloud computing environments. The company’s earnings outlook has improved across all timeframes, landing ANET into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
It’s impossible to ignore the company’s growth trajectory, with the Zacks Consensus EPS Estimate of $5.76 for its current fiscal year (FY23) indicating an improvement of 26% year-over-year.
And in FY24, the company’s earnings are forecasted to grow a further 12%.
ANET shares trade at a 26.9X forward earnings multiple, undoubtedly on the higher end of the spectrum but well below the 34.4X five-year median.
Tech stocks are generally pricey, as that’s the price investors pay for growth.
Image Source: Zacks Investment Research
MSCI Inc.
MSCI is a leading provider of critical decision support tools and services for the global investment community, widely known for ESG research and ratings. Currently, the company sports a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
The company’s growth outlook is bright, with estimates forecasting year-over-year earnings growth of 12% in its current fiscal year (FY23) and 16% in FY24.
Top line growth is also apparent, with the company expected to witness 10% year-over-year sales growth in FY23 and 11.3% in FY24.
In addition, MSCI shares provide exposure to tech paired with an income stream; the company’s annual dividend currently yields 1%, a tick above the Zacks Computer and Technology sector average.
Impressively, the company’s payout has grown by nearly 25% over the last five years.
Image Source: Zacks Investment Research
Bottom Line
Investors have their preferences within the market and for understandable reasons. While some reap a steady income stream, others are rewarded with explosive growth.
And for those interested in companies growing their top and bottom lines at rapid paces, all three above – Airbnb (ABNB - Free Report) , Arista Networks (ANET - Free Report) , and MSCI Inc. (MSCI - Free Report) – are forecasted to do precisely that.
In addition, all three sport a favorable Zacks Rank, indicating that their near-term business outlooks have shifted positively.
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Don't Ignore These 3 Companies' Growth Trajectories
There are many types of investing styles deployed within the market. Some investors prefer to target income, some prefer value, and some prefer to target growth.
Of course, those who gravitate toward the growth investing style commonly target technology companies, as their long-term potential is hard to ignore.
And as we’ve witnessed in 2023, technology stocks have finally found buyers following a brutal 2022.
Three stocks from the Zacks Computer and Technology sector – Airbnb (ABNB - Free Report) , Arista Networks (ANET - Free Report) , and MSCI Inc. (MSCI - Free Report) – are all expected to witness solid top and bottom line growth in their respective fiscal years.
Below is a chart illustrating the year-to-date performance of all three stocks, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at each one.
Airbnb
Airbnb is a leading platform for unique stays and experiences, providing a marketplace for connecting hosts and guests online or through mobile devices. Analysts have taken a bullish stance on the company’s earnings outlook, pushing ABNB into a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
It’s hard to ignore the company’s growth profile, with earnings forecasted to climb 21% in its current fiscal year (FY23) and a further 20% in FY24.
The projected earnings growth comes on top of forecasted year-over-year revenue upticks of 14.9% in FY23 and 15.3% in FY24.
Image Source: Zacks Investment Research
And for the cherry on top, Airbnb posted strong quarterly results in its latest release, exceeding the Zacks Consensus EPS Estimate by nearly 80% and reporting revenue 2% ahead of expectations.
The market liked the results, with ABNB shares gaining more than 13% in the following trading session.
Image Source: Zacks Investment Research
Arista Networks
Arista Networks provides cloud networking solutions for data centers and cloud computing environments. The company’s earnings outlook has improved across all timeframes, landing ANET into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
It’s impossible to ignore the company’s growth trajectory, with the Zacks Consensus EPS Estimate of $5.76 for its current fiscal year (FY23) indicating an improvement of 26% year-over-year.
And in FY24, the company’s earnings are forecasted to grow a further 12%.
ANET shares trade at a 26.9X forward earnings multiple, undoubtedly on the higher end of the spectrum but well below the 34.4X five-year median.
Tech stocks are generally pricey, as that’s the price investors pay for growth.
Image Source: Zacks Investment Research
MSCI Inc.
MSCI is a leading provider of critical decision support tools and services for the global investment community, widely known for ESG research and ratings. Currently, the company sports a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
The company’s growth outlook is bright, with estimates forecasting year-over-year earnings growth of 12% in its current fiscal year (FY23) and 16% in FY24.
Top line growth is also apparent, with the company expected to witness 10% year-over-year sales growth in FY23 and 11.3% in FY24.
In addition, MSCI shares provide exposure to tech paired with an income stream; the company’s annual dividend currently yields 1%, a tick above the Zacks Computer and Technology sector average.
Impressively, the company’s payout has grown by nearly 25% over the last five years.
Image Source: Zacks Investment Research
Bottom Line
Investors have their preferences within the market and for understandable reasons. While some reap a steady income stream, others are rewarded with explosive growth.
And for those interested in companies growing their top and bottom lines at rapid paces, all three above – Airbnb (ABNB - Free Report) , Arista Networks (ANET - Free Report) , and MSCI Inc. (MSCI - Free Report) – are forecasted to do precisely that.
In addition, all three sport a favorable Zacks Rank, indicating that their near-term business outlooks have shifted positively.