3 monster growth stocks that could hit new highs
Every investor knows that you cannot look at the past performance of a stock as a predictor of future earnings. It has even become an axiom, one of the stock phrases we all come to know in Econ 101: “Past performance does not guarantee future returns” is a common phrase. While that simple phrase raises a difficult question: How should an investor judge a stock? The truth is, the past is a prologue, not a prophet, and investors can benefit from considering past performance as one of many factors in valuing a stock. There’s no surefire way to succeed here, and each stock should be viewed as a unique individual – which makes past performance a useful indicator, even if it’s not the only one. Investors should look for Wall Street’s view too – are analysts impressed with the stock? And what is the upside potential beyond that? Now we have a useful profile for monster growth stocks: gangbuster earnings, buy ratings from the Wall Street analyst corps, and significant upside moves for the year ahead. Three stocks in the TipRanks database indicate strong forward growth. Here are the details. Amyris, Inc. (AMRS) Say “biotech,” and most people assume you’re talking about pharmaceuticals. But Amyris is giving the biotech industry a different twist. The company focuses on the development of synthetic chemical substitutes for common petroleum, plant and animal based products. Amyris operates three cosmetic, health & wellness and food flavoring development divisions, which are offered to the public through three direct-to-consumer brands: Pipette, Biossance and Purecane. AMRS stocks have seen rapid growth lately and have started for the past six months. During that time, the company’s stock rose 786%, which is impressive in every way. The company’s growth has accelerated in recent months, and a look at its latest earnings report for the fourth quarter of 20 will reveal a few reasons. The fourth quarter was the third consecutive quarter of record sales of products. The company had total sales of $ 80 million, more than doubling its earnings for the previous quarter. Of that, product sales were $ 35 million, up 71% year over year. The company saw a significant year-over-year increase in gross margins from 56% to 66%. The increase in revenue resulted in total annual revenue of $ 173 million, an increase of 13% over the previous year. Looking towards the end of 2021, the company is targeting further increases in product sales, resulting in total sales of nearly $ 400 million for the full year, well above the consensus forecast of $ 231 million. 5-star analyst Craig Irwin covers this stock for Roth Capital, citing the company’s guidance and recent growth. Irwin also points out that Amyris is well positioned to maintain his breakneck pace. “Long-term growth is supported by a strong pipeline of new molecules being developed with strategic partners. With 13 ingredients on the market and 18 in active development, we expect continued healthy portfolio expansion as they hit the market by 2025. Mgmt expects to add another 8-10 ingredients to its active development pipeline in 2021, while maintaining a broad channel for expanding long-term product and ingredient potential, ”said Irwin. Unsurprisingly, Irwin rates AMRS as a buy, and its target price of $ 33 implies upside potential of 59% over the next 12 months. (To see Irwin’s track record, click here.) The rapid growth will always make Wall Street analysts innovators. Amyris has received 4 most recent buy reviews, all of which merge into one strong buy consensus rating. AMRS has a share price of $ 20.65, and even after its recent appreciation, its average target price of $ 25.50 still suggests an upward trend of 23% for a year. (See AMRS stock analysis on TipRanks.) Clean Energy Fuels (CLNE) The next growth stock we’ll look at is in the renewable fuel industry. This is a sector that is growing partly because of the political cachet – renewable energies are an in-thing – and partly because of the strength of the business model. Clean Energy produces renewable natural gas (RNG) for transportation purposes. The company’s fuel products are marketed to transit and transport customers. Clean Energy’s customers include Estes Express Lines, UPS and the New York MTA. In early February, Clean Energy announced a major multi-year contract to equip the LA County Metro System – the largest fleet of buses in the US – with 47.5 million gallons of RNG. The agreement is part of a move by LA Metro to low-carbon fuels. Clean Energy received three filling stations for five years with the option to extend the contract for a further three years. This is in addition to five tank storage facilities that Clean Energy already operates for Metro. The LA Metro news came after CLNE stock posted explosive growth recently. This was part of a general development where the stock has risen 492% over the past 6 months. This increase coincided with several other recent contracts that totaled over 58 million gallons of RNG. Customers include Pacific Green Trucking and Waste Connections. Craig Hallum analyst Eric Stine, who was rated 5 stars by TipRanks, writes about Clean Energy: “We believe it is becoming increasingly clear that natural gas (and RNG) will be a critical fuel in the decarbonization of transport the first time Amazon deployed an exclamation point. Given the dominant position of CLNE and the RNG plans, the significant financial impact of RNG, compounded by the increased contribution of low CI RNG, and the most expansive footprint of stations, we see and also see CLNE as an ideal investment in natural gas that this is one of the few pure play investments in renewable natural gas. “Given his bullish comments, Stine sets a buy rating and a price target of $ 25 on the CLNE. His goal shows confidence in 68% growth for the coming year. (To see Stine’s track record, click here.) Overall, Wall Street analysts are confident this stock can continue to make new highs. CLNE’s consensus strong buy rating is based on 3 buy and 1 hold. It doesn’t hurt that the average price target of $ 23 puts the potential 12 month increase at ~ 55%. (See CLNE stock analysis on TipRanks) Aemetis (AMTX) Aemetis is another company focused on renewable fuels. Aemetis’ main products are ethanol and biodiesel as well as glycerine, an important industrial chemical. However, the company does not rest on one sector and has a broad production portfolio that also includes burner grains, edible oils, palm olein and other foods. Aemetis markets heavily in the Indian food sector and in California’s Central Valley. Aemetis shares have seen robust growth recently, with net earnings of 736% year-to-date. A significant portion of this gain is due to the company’s announcement that it will start operating a “carbon zero” facility for the production of renewable truck and jet fuels with a capacity of 23 million gallons per year. The company has also released a five-year growth plan that has total sales of $ 1 billion by 2025. Aemetis reported fourth quarter results earlier this month, and despite the year-over-year losses, the company was able to positively impact results. The report found that despite severe demand disruptions, fuel-grade ethanol and fuel-grade alcohol revenues were $ 112 million in 2020, just $ 3 million less than the previous year. Amit Dayal, who ranks ninth among Wall Street analysts overall, notes this in his latest coverage of AMTX. “We believe the company is emerging as a leader in implementing a zero-to-negative carbon intensity (CI) strategy to bring renewable fuels to market that should support a margin profile that is superior to competitors . We also believe the company has planned these initiatives well in a very friendly federal regulatory environment which increases the likelihood of success, ”Dayal wrote. To this end, Dayal sets a price target of $ 28 on the stock, supports his buy recommendation and suggests a growth potential of 34% for one year. (To see Dayal’s track record, click here.) AMTX stocks have managed to get under the radar so far, receiving only two recent valuations. However, both agree that this stock is an offer to buy. The stock is priced at $ 20.83 with an average target of $ 26.50 that offers room for 27% growth through year-end. (See AMTX stock analysis on TipRanks.) To find great ideas for trading growth stocks at attractive valuations, visit TipRanks ‘Best Stocks to Buy, a newly launched tool that brings together all of TipRanks’ stock insights. Disclaimer: The opinions expressed in this article are solely those of the presented analysts. The content is intended to be used for informational purposes only. It is very important that you do your own analysis before making any investment.