Investors looking for opportunities amid fast-growing, small-cap stocks may want to consider the following companies as their trailing 12-month earnings per share have increased significantly on a year-over-year basis, producing, in some cases, a positive reversal.
Sell-side analysts on Wall Street also forecast that these stocks will keep on improving their earnings over the next couple of years, triggering the issuance of positive recommendation ratings.
Purple Innovation
The first company investors may want to consider is Purple Innovation Inc. (PRPL, Financial), a Lehi, Utah-based manufacturer and seller of mattresses and other bedding products. The stock has a market capitalization of $1.07 billion.
Purple’s trailing 12-month earnings per share was one cent as of the most recent quarter, which ended on March 30, shifting from a net loss of 35 cents per share as of the comparable quarter of 2019.
Wall Street sell-side analysts predict that the company’s earnings will increase by 23.1% on average every year over the next five years.
The stock holds a buy recommendation rating on Wall Street.
The share price ($19.73 as of July 10) has risen nearly 200% in the past year, determining a 52-week range of $4.42 to $19.8.
With 15.26% of shares outstanding, Coliseum Capital Management LLC is the company's top fund holder, followed by Woodson Capital Managemen, LP with 4.33% and Hood River Capital Management LLC with 2.03%.
InMode
The second company to consider is InMode Ltd. (INMD, Financial), an Israeli developer and manufacturer of minimally invasive aesthetic medical devices. The stock has a market capitalization of $846.87 million.
InMode’s trailing 12-month earnings were $1.48 per diluted share as of the first quarter of 2020, doubling from 74 cents a year ago.
Wall Street sell-side analysts predict that the company will increase earnings by an annual average of nearly 14% over the next five years.
The analysts have also recommended a buy rating for the stock.
The share price ($25.82 as of July 10) has risen 90.3% in the past year, determining a 52-week range of $13.06 to $58.76.
The company's top fund holder is D1 Capital Partners L.P. with 2.96% of shares outstanding, followed by Miura Global Management LLC with 2.77% and Millennium Management LLC with 0.83%.
E.l.f. Beauty
The third company under consideration is e.l.f. Beauty Inc. (ELF, Financial), an Oakland, California-based provider of cosmetic and skin care products. The stock has a market capitalization of $1 billion.
E.l.f. Beauty has improved its bottom line over the last 12 months tremendously, switching to a net profit of 35 cents per diluted share in full fiscal 2020, which ended on March 30, from a net loss of 6 cents per diluted share for full fiscal 2019.
Wall Street sell-side analysts predict that e.l.f. Beauty Inc will continue to improve its earnings per share at a 7.15% growth rate per annum over the next five years.
The stock holds an overweight recommendation rating on Wall Street, which means that its share price is expected to outperform either the industry or the entire market within a year.
E.l.f. Beauty’s share price ($20.06 as of July 10) has risen 20.7% in the past year, determining a 52-week range of $7.58 to $20.95.
The company's top fund holder is TPG Group Holdings (SBS) Advisors Inc. with 7.36% of shares outstanding, followed by Champlain Investment Partners LLC with 7.29% and Victory Capital Management Inc. with 7.19%.
Disclosure: I have no positions in any securities mentioned.
Read more here:
- A Trio of Picks for the Value Investor
- 3 Stocks Trading at Tempting Valuations
- A Trio of Stocks Growing Earnings Fast
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