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Top 5 Growth Stocks for July After a Fabulous 1H 2023
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Wall Street ended a fabulous first half, with three major stock indexes ending in positive territory. The S&P 500 and the Nasdaq Composite recorded their best first half since 2019 and 1983, respectively. The Dow relatively lagged. Yet, the blue-chip index managed to finish the first half of this year in green.
Growth stocks suffered the most last year, owing to the extremely tight monetary policies and higher interest rate regime pursued by the Fed. However, the situation has reversed this year, as the central bank reduced the magnitude of rate hike after the inflation rate dropped steadily.
Of the 11 broad sectors of the market’s benchmark — the S&P 500 Index — the three growth-oriented sectors, namely, the Technology Select Sector SPDR (XLK), the Communication Services Select Sector SPDR (XLC) and the Consumer Discretionary Select Sector SPDR (XLY) have surged 35.9%, 35.6% and 31.5%, respectively, year to date.
The growth stocks are likely to outperform markets in July as the U.S. economy remained strong and the fear of a recession have evaporated to a great extent. At this stage, it will be prudent to invest in growth stocks with a favorable Zacks Rank.
Our Top Picks
We have narrowed our search to five growth stocks that have solid upside left for 2023. These stocks have also witnessed positive earnings estimate revisions in the last 30 days. Each of our picks carries a Zacks Rank #1 (Strong Buy) and has a Growth Score A. You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
Palo Alto Networks Inc. (PANW - Free Report) has been benefiting from continuous deal wins and the increasing adoption of its next-generation security platforms, attributable to the rise in the remote work environment and the need for stronger security.
Growing traction in Prisma and Cortex offerings is acting as a tailwind. PANW continues to acquire new customers and increase wallet share with existing customers. Our estimates suggests that Palo Alto’s revenues will witness a CAGR of 21.1% through fiscal 2023-2025.
Palo Alto Networks has an expected revenue and earnings growth rate of 25.4% and 69.4%, respectively, for the current year (ending July 2023). The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the last 30 days.
Royal Caribbean Cruises Ltd. (RCL - Free Report) has been benefiting from strong close-in bookings at higher prices and continued strength of onboard spending driving load factors. Considering the extension of the WAVE season and solid pent-up demand, RCL raised its 2023 guidance. RCL expects adjusted EPS in the range of $4.40-$4.80, up from the previously stated $3-$3.60.
Royal Caribbean Cruises has an expected revenue and earnings growth rate of 48.7% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the past 30 days.
Celsius Holdings Inc. (CELH - Free Report) specializes in commercializing healthier, nutritional functional foods, beverages and dietary supplements. CELH markets Celsius, the calorie burner, through its wholly-owned operating subsidiary, Celsius Inc. CELH sells its products through grocery, drug, convenience, club and mass, and health and fitness channels.
Celsius Holdings has an expected revenue and earnings growth rate of 69.6% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 30 days.
salesforce.com inc. (CRM - Free Report) is benefiting from a robust demand environment as customers are undergoing a major digital transformation. The rapid adoption of its cloud-based solutions is driving demand for CRM’s products. CRM’s sustained focus on introducing more aligned products as per customer needs is driving its top-line.
Continued deal wins in the international market are the other growth drivers. The acquisition of Slack would position salesforce.com as a leader in the enterprise team collaboration solution space and help it compete better with Microsoft’s Teams product. We expect CRM revenues to witness a CAGR of 12.5% during fiscal 2023-2025.
salesforce.com has an expected revenue and earnings growth rate of 10.5% and 42%, respectively, for the current year (January 2024). The Zacks Consensus Estimate for current-year earnings has improved 3.6% over the last 30 days.
VeriSign Inc. ‘s (VRSN - Free Report) performance is gaining from growth in .com and .net domain name registrations. VRSN registered 174.8 million .com and .net domain names by the first quarter of 2023-end. VRSN is well-poised to gain from the increasing global use of the Internet.
VeriSign continues to expand its critical infrastructure to tap the growing demand for DNS navigation services in industries like commerce, education and healthcare. VRSN has increased the lower end of guidance for its domain name base growth due to modest improvement in the registration trend.
VeriSign has an expected revenue and earnings growth rate of 4.9% and 10.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.6% over the last 30 days.
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Top 5 Growth Stocks for July After a Fabulous 1H 2023
Wall Street ended a fabulous first half, with three major stock indexes ending in positive territory. The S&P 500 and the Nasdaq Composite recorded their best first half since 2019 and 1983, respectively. The Dow relatively lagged. Yet, the blue-chip index managed to finish the first half of this year in green.
Growth stocks suffered the most last year, owing to the extremely tight monetary policies and higher interest rate regime pursued by the Fed. However, the situation has reversed this year, as the central bank reduced the magnitude of rate hike after the inflation rate dropped steadily.
Of the 11 broad sectors of the market’s benchmark — the S&P 500 Index — the three growth-oriented sectors, namely, the Technology Select Sector SPDR (XLK), the Communication Services Select Sector SPDR (XLC) and the Consumer Discretionary Select Sector SPDR (XLY) have surged 35.9%, 35.6% and 31.5%, respectively, year to date.
The growth stocks are likely to outperform markets in July as the U.S. economy remained strong and the fear of a recession have evaporated to a great extent. At this stage, it will be prudent to invest in growth stocks with a favorable Zacks Rank.
Our Top Picks
We have narrowed our search to five growth stocks that have solid upside left for 2023. These stocks have also witnessed positive earnings estimate revisions in the last 30 days. Each of our picks carries a Zacks Rank #1 (Strong Buy) and has a Growth Score A. You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
Palo Alto Networks Inc. (PANW - Free Report) has been benefiting from continuous deal wins and the increasing adoption of its next-generation security platforms, attributable to the rise in the remote work environment and the need for stronger security.
Growing traction in Prisma and Cortex offerings is acting as a tailwind. PANW continues to acquire new customers and increase wallet share with existing customers. Our estimates suggests that Palo Alto’s revenues will witness a CAGR of 21.1% through fiscal 2023-2025.
Palo Alto Networks has an expected revenue and earnings growth rate of 25.4% and 69.4%, respectively, for the current year (ending July 2023). The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the last 30 days.
Royal Caribbean Cruises Ltd. (RCL - Free Report) has been benefiting from strong close-in bookings at higher prices and continued strength of onboard spending driving load factors. Considering the extension of the WAVE season and solid pent-up demand, RCL raised its 2023 guidance. RCL expects adjusted EPS in the range of $4.40-$4.80, up from the previously stated $3-$3.60.
Royal Caribbean Cruises has an expected revenue and earnings growth rate of 48.7% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the past 30 days.
Celsius Holdings Inc. (CELH - Free Report) specializes in commercializing healthier, nutritional functional foods, beverages and dietary supplements. CELH markets Celsius, the calorie burner, through its wholly-owned operating subsidiary, Celsius Inc. CELH sells its products through grocery, drug, convenience, club and mass, and health and fitness channels.
Celsius Holdings has an expected revenue and earnings growth rate of 69.6% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 30 days.
salesforce.com inc. (CRM - Free Report) is benefiting from a robust demand environment as customers are undergoing a major digital transformation. The rapid adoption of its cloud-based solutions is driving demand for CRM’s products. CRM’s sustained focus on introducing more aligned products as per customer needs is driving its top-line.
Continued deal wins in the international market are the other growth drivers. The acquisition of Slack would position salesforce.com as a leader in the enterprise team collaboration solution space and help it compete better with Microsoft’s Teams product. We expect CRM revenues to witness a CAGR of 12.5% during fiscal 2023-2025.
salesforce.com has an expected revenue and earnings growth rate of 10.5% and 42%, respectively, for the current year (January 2024). The Zacks Consensus Estimate for current-year earnings has improved 3.6% over the last 30 days.
VeriSign Inc. ‘s (VRSN - Free Report) performance is gaining from growth in .com and .net domain name registrations. VRSN registered 174.8 million .com and .net domain names by the first quarter of 2023-end. VRSN is well-poised to gain from the increasing global use of the Internet.
VeriSign continues to expand its critical infrastructure to tap the growing demand for DNS navigation services in industries like commerce, education and healthcare. VRSN has increased the lower end of guidance for its domain name base growth due to modest improvement in the registration trend.
VeriSign has an expected revenue and earnings growth rate of 4.9% and 10.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.6% over the last 30 days.