Unleashing Untapped Potential
Amidst the tumultuous ups and downs of recent years, investors have witnessed top-notch stocks falter from their glory days, struggling to reclaim lost value. Yet, resilient companies with sturdy foundations seldom fail in the grand scheme of things. Despite facing setbacks, these enterprises are primed for a rebound that promises handsome rewards for those willing to withstand the tempest.
The Rise of Block (SQ)
Dubbed as one of the fintech stragglers, Block (NYSE:SQ) may have languished around the $70 mark for nearly two years. However, beneath this façade, the company’s core operations continue to exhibit unwavering growth, complemented by proficient management execution.
Once seen as a high-growth contender against PayPal (NASDAQ:PYPL), Block grappled with profit disparities. A recent turnaround has alleviated these concerns, steering the company toward profitability and accelerated earnings. With a 25% revenue surge in 2023 and a nascent positive net income of $9.8 million, Block’s trajectory towards a projected $6.40 earnings per share by 2026 signals not only robust expansion but also profitability. Such a high-growth, lucrative fintech entity is often evaluated at 10-times forward sales, making Block an unequivocal bargain.
Alibaba: Weathering the Storm
Despite disappointing shareholders, Alibaba (NYSE:BABA) remains embroiled in turbulence stemming from Chinese regulatory scrutiny and subdued growth sentiments. Notably, China’s e-commerce arena is projected to sustain a 10%-plus year-over-year growth trajectory until 2029, hinting at potential valuation upswings for Alibaba.
The exodus of Jack Ma from Alibaba’s helm, coupled with China’s recent stimulus endeavors fostering market recovery, paints a mildly optimistic picture for Alibaba. If a sustained resurgence materializes, Alibaba stands to become a star among the comeback stocks roster.
PDD Holdings: A Beacon of Growth
In stark contrast, PDD Holdings (NASDAQ:PDD) emerges as a rare growth anomaly among the Chinese cohort. Operating Pinduoduo within China and Temu outside its borders, this company stands distinct with its meteoric growth narrative, despite not enduring as steep a downtrend as its peers.
With an 89.7% year-over-year revenue surge and a staggering 90.3% net income leap in 2023, PDD Holdings’ trajectory hints at relentless advancement. Anticipated revenue growth of 49.3% in 2024 alongside a 30% earnings per share surge underscores the stock’s current undervaluation at 15-times forward earnings, presenting investors with a tantalizing bargain.
On the date of publication, Omor Ibne Ehsan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Omor Ibne Ehsan is a writer at InvestorPlace. He is a self-taught investor with a focus on growth and cyclical stocks that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as cryptocurrencies and penny stocks. You can follow him on LinkedIn.
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