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5 Growth Stocks to Buy for Steady Returns in April
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Wall Street ended a strong March, marking the fifth consecutive positive month for all three major stock indexes. Last month, the Dow, the S&P 500 and the Nasdaq Composite were up 2.1%, 3.1% and 1.8%, respectively. In fact, the Dow posted its first five-month winning streak since May 2021. At this stage, it will be prudent to invest in growth stocks that have strong potential to gain in the near-term.
Labor Market Remains Resilient
The Department of Labor reported that the U.S. economy added 303,000 nonfarm jobs in March, well above the consensus estimate of 195,000. The unemployment rate in March was 3.8% compared with 3.9% in December. The consensus estimate was 3.9%. However, the real unemployment rate (including discouraged workers and those holding part-time jobs for economic reasons) held steady at 7.3%.
The hourly wage rate increased 0.3% in March compared with 0.2% in December. The consensus estimate was 0.3%. Year over year, the hourly wage rate increased 4.1%, in line with the consensus estimate.
Inflation is Dwindling
The Department of Labor reported that the headline PCE inflation rate rose 0.3% month over month in February compared with 0.4% in the previous month. Year over year, PCE inflation rose 2.5% in February compared with 2.4% in January.
Core PCE inflation rate (excluding volatile food and energy items) — Fed’s favorite inflation gauge — rose 0.3% month over month in February compared with 0.5% in the previous month. Year over year, core PCE inflation rose 2.8% in February compared with 2.9% in January. Fed Chairman Jerome Powell said that the data was in line with expectations.
Robust U.S. Economy
Personal consumption expenditure increased 0.8% month over month in February, compared with the consensus estimate of 0.5% and a 0.2% increase in January. Personal income rose 0.3% month over month in February, compared with the consensus estimate of 0.5% and a 1% increase in January. The personal savings rate dropped to 3.6% in February from the upwardly revised 4.1% in January.
U.S. GDP rose 2.5% in 2023 compared with 1.9% in 2022. At the beginning of 2023, the consensus estimate for full-year GDP was 2%. On Apr 4, the Atlanta Fed GDPNow tracker forecast a 2.5% growth rate for first-quarter 2024, indicating, no chance of a near-term recession.
Our Top Picks
We have narrowed our search to five growth stocks that have solid upside left for 2024. These stocks have witnessed positive earnings estimate revisions in the last 60 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 in the past three months.
Image Source: Zacks Investment Research
UiPath Inc. (PATH - Free Report) provides an end-to-end automation platform that offers a range of robotic process automation solutions primarily in the United States, Romania, and Japan. PATH offers a suite of interrelated software to build, manage, run, engage, measure, and govern automation within the organization. PATH’s platform combines artificial intelligence with desktop recording, back-end mining of both human activity and system logs, and intuitive visualization tools.
UiPath has an expected revenue and earnings growth rate of 15.9% and 5.6%, respectively, for the current year (ending January 2025). The Zacks Consensus Estimate for current-year earnings has improved 16.3% over the last 30 days.
Vertiv Holdings Co. (VRT - Free Report) designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. VRT offers hardware, software, analytics and ongoing services.
Vertiv Holdings has an expected revenue and earnings growth rate of 11.1% and 32.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.9% over the last 60 days.
Ralph Lauren Corp. (RL - Free Report) has benefited from robust demand and brand strength. RL has been on track with its Next Great Chapter: Accelerate plan. This is evident from RL’s impressive performance in third-quarter fiscal 2024.
Both top and bottom lines have also improved year over year. A favorable product mix and lower freight costs contributed to the bottom line. For fiscal 2024, RL anticipates revenue growth (cc) in the low-single digits.
Ralph Lauren has an expected revenue and earnings growth rate of 4.2% and 9.5%, respectively, for the current year (ending March 2025). The Zacks Consensus Estimate for current-year earnings has improved 7.5% over the last 60 days.
Burlington Stores Inc. (BURL - Free Report) is dynamically transitioning toward an off-price model under its Burlington 2.0 initiative, focusing on key areas like marketing, merchandising and store layout to enhance customer value and operational efficiency.
The strategy has garnered investor confidence, as reflected in BURL’s stock performance and positive fiscal 2024 outlook, with expected sales growth of 9-11%. BURL aims to reach $16 billion in sales by 2028, supported by strategic expansions.
Burlington Stores has an expected revenue and earnings growth rate of 10.2% and 22.3%, respectively, for the current year (ending March 2025). The Zacks Consensus Estimate for current-year earnings has improved 4.7% over the last 30 days.
Advanced Drainage Systems Inc. (WMS - Free Report) is a manufacturer of thermoplastic corrugated pipe, providing a comprehensive suite of water management products and drainage solutions for use in the construction and infrastructure marketplace.
WMS provides single, double, and triple wall corrugated polypropylene and polyethylene pipes, and allied products comprising PVC drainage structures, fittings and filters, and water quality filters and separators. WMS’ products are used across a broad range of end markets and applications, including non-residential, residential, agriculture and infrastructure applications.
Advanced Drainage Systems has an expected revenue and earnings growth rate of 7.6% and 12.3%, respectively, for the current year (ending March 2025). The Zacks Consensus Estimate for current-year earnings has improved 10% over the last 60 days.
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5 Growth Stocks to Buy for Steady Returns in April
Wall Street ended a strong March, marking the fifth consecutive positive month for all three major stock indexes. Last month, the Dow, the S&P 500 and the Nasdaq Composite were up 2.1%, 3.1% and 1.8%, respectively. In fact, the Dow posted its first five-month winning streak since May 2021. At this stage, it will be prudent to invest in growth stocks that have strong potential to gain in the near-term.
Labor Market Remains Resilient
The Department of Labor reported that the U.S. economy added 303,000 nonfarm jobs in March, well above the consensus estimate of 195,000. The unemployment rate in March was 3.8% compared with 3.9% in December. The consensus estimate was 3.9%. However, the real unemployment rate (including discouraged workers and those holding part-time jobs for economic reasons) held steady at 7.3%.
The hourly wage rate increased 0.3% in March compared with 0.2% in December. The consensus estimate was 0.3%. Year over year, the hourly wage rate increased 4.1%, in line with the consensus estimate.
Inflation is Dwindling
The Department of Labor reported that the headline PCE inflation rate rose 0.3% month over month in February compared with 0.4% in the previous month. Year over year, PCE inflation rose 2.5% in February compared with 2.4% in January.
Core PCE inflation rate (excluding volatile food and energy items) — Fed’s favorite inflation gauge — rose 0.3% month over month in February compared with 0.5% in the previous month. Year over year, core PCE inflation rose 2.8% in February compared with 2.9% in January. Fed Chairman Jerome Powell said that the data was in line with expectations.
Robust U.S. Economy
Personal consumption expenditure increased 0.8% month over month in February, compared with the consensus estimate of 0.5% and a 0.2% increase in January. Personal income rose 0.3% month over month in February, compared with the consensus estimate of 0.5% and a 1% increase in January. The personal savings rate dropped to 3.6% in February from the upwardly revised 4.1% in January.
U.S. GDP rose 2.5% in 2023 compared with 1.9% in 2022. At the beginning of 2023, the consensus estimate for full-year GDP was 2%. On Apr 4, the Atlanta Fed GDPNow tracker forecast a 2.5% growth rate for first-quarter 2024, indicating, no chance of a near-term recession.
Our Top Picks
We have narrowed our search to five growth stocks that have solid upside left for 2024. These stocks have witnessed positive earnings estimate revisions in the last 60 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 in the past three months.
Image Source: Zacks Investment Research
UiPath Inc. (PATH - Free Report) provides an end-to-end automation platform that offers a range of robotic process automation solutions primarily in the United States, Romania, and Japan. PATH offers a suite of interrelated software to build, manage, run, engage, measure, and govern automation within the organization. PATH’s platform combines artificial intelligence with desktop recording, back-end mining of both human activity and system logs, and intuitive visualization tools.
UiPath has an expected revenue and earnings growth rate of 15.9% and 5.6%, respectively, for the current year (ending January 2025). The Zacks Consensus Estimate for current-year earnings has improved 16.3% over the last 30 days.
Vertiv Holdings Co. (VRT - Free Report) designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. VRT offers hardware, software, analytics and ongoing services.
Vertiv Holdings has an expected revenue and earnings growth rate of 11.1% and 32.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.9% over the last 60 days.
Ralph Lauren Corp. (RL - Free Report) has benefited from robust demand and brand strength. RL has been on track with its Next Great Chapter: Accelerate plan. This is evident from RL’s impressive performance in third-quarter fiscal 2024.
Both top and bottom lines have also improved year over year. A favorable product mix and lower freight costs contributed to the bottom line. For fiscal 2024, RL anticipates revenue growth (cc) in the low-single digits.
Ralph Lauren has an expected revenue and earnings growth rate of 4.2% and 9.5%, respectively, for the current year (ending March 2025). The Zacks Consensus Estimate for current-year earnings has improved 7.5% over the last 60 days.
Burlington Stores Inc. (BURL - Free Report) is dynamically transitioning toward an off-price model under its Burlington 2.0 initiative, focusing on key areas like marketing, merchandising and store layout to enhance customer value and operational efficiency.
The strategy has garnered investor confidence, as reflected in BURL’s stock performance and positive fiscal 2024 outlook, with expected sales growth of 9-11%. BURL aims to reach $16 billion in sales by 2028, supported by strategic expansions.
Burlington Stores has an expected revenue and earnings growth rate of 10.2% and 22.3%, respectively, for the current year (ending March 2025). The Zacks Consensus Estimate for current-year earnings has improved 4.7% over the last 30 days.
Advanced Drainage Systems Inc. (WMS - Free Report) is a manufacturer of thermoplastic corrugated pipe, providing a comprehensive suite of water management products and drainage solutions for use in the construction and infrastructure marketplace.
WMS provides single, double, and triple wall corrugated polypropylene and polyethylene pipes, and allied products comprising PVC drainage structures, fittings and filters, and water quality filters and separators. WMS’ products are used across a broad range of end markets and applications, including non-residential, residential, agriculture and infrastructure applications.
Advanced Drainage Systems has an expected revenue and earnings growth rate of 7.6% and 12.3%, respectively, for the current year (ending March 2025). The Zacks Consensus Estimate for current-year earnings has improved 10% over the last 60 days.