Growth stocks are popular among investors who seek to earn large profits in shorter time frames. There is some additional risk which accompanies corporations that have high growth expectations, so it is important to find stocks which meet important growth criteria. One of these important factors include identifying candidates capable of seeing high sales growth. Sales are the lifeblood for any stock, and this is because top line growth goes a long way in fostering higher earnings levels.
Many companies promise high sales growth, but it is important to see that these firms have also proven themselves historically with regards to increasing revenue numbers consistently year after year. We’ve identified two great candidates who have a great sales outlook this year. They’ve also got a nice track record for growing sales over the years.
58.com is one of the largest online marketplaces serving local merchants and consumers in China. The company offers housing rental, recruitment, travel, catering, entertainment, and group-buying services. Essentially, the China-based company functions like Craigslist, and it has a wide reach across many businesses, consumers, and locations within China. WUBA stock is a Zacks Rank #2 (Buy), and you should expect more volatility from this stock since it has a beta of 2.21.
58.com has seen its sales grow by 721.8% since 2012, and the company has done well to increase its revenues in recent history as well. Between 2014 and 2015, WUBA saw its sales more than double, blossoming by 169.8% over the year. The growth story isn’t expected to slow down this year either, as sales are projected to grow by 75.5%. The bottom line is expected to improve, and this is good since the company incurred a sizable earnings loss in 2015. The company has to do better with regards to managing SG&A expenses. Luckily, the company has topped EPS expectations over each of the last four quarters, beating by an average of 46.06% per quarter over that span of time.
Tuniu Corporation-( TOUR Quick Quote TOUR - Free Report)
Tuniu is an online leisure travel company in China. It engages in providing packaged tours, organized tours, self-guided tours, and other travel related products and services. The company offers packaged tours across over 150 countries in addition to attractions within China. Tuniu is a Zacks Rank #2 (Buy) and it has a market cap of $1.09 billion.
Tuniu had sales of $322 million in 2013, and the company has grown its revenues by 266% since then. 2015 sales totaled $1.18 billion, and revenues grew by 107% last year. The company’s market cap is trading for less than what the company generated in sales, and TOUR shares currently trade at a forward price-to-sales of 0.55. A price-to-sales under one may suggest that a stock is undervalued. Tuniu is trading at such a low multiple of its sales because it incurs a lot of expenses to foster sales growth. The company beat our EPS consensus estimate by 16.67% last quarter, so hopefully it continues to surprise investors as it heads into its second quarter earnings report in late August.
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