As a result of the turmoil that the Covid-19 epidemic is causing to the U.S. economy, forecasters anticipate a lower annual growth rate for the gross domestic product in 2020. They estimate that the U.S. economy will hit a 1.8% annual growth rate this year versus 2.3% posted in the final quarter of 2019.
The U.S. economy will continue to be driven by consumer spending, according to analysts. The largest component of the U.S. GDP is expected to reach $13.652 trillion before the first quarter of 2021, reflecting a 1.77% increase from $13.414 trillion in the last quarter of 2019.
Businesses will ideally generate higher net earnings as consumer spending grows, helping their U.S.-listed stocks to abandon the bear market quicker once the crisis is over. Thus, investors may want to prepare themselves for the rebound by increasing their holdings in stocks that are predicted to make the best out of the subsequent tailwind.
The following fast-growing, U.S.-listed equities with a market cap between $300 million and $2 billion are projected to keep on posting impressive net earnings per share growth, outperforming the S&P 500.
SPS Commerce
The first company to have a look at is SPS Commerce Inc (SPSC, Financial), a Minneapolis, Minnesota-based provider of cloud-based supply chain management solutions to clients worldwide with a market capitalization of around $1.54 billion.
SPS Commerce saw its trailing 12-month net earnings per share without non-recurring items (EPS without NRI) growing 38.2% year over year to 94 cents per common share in full-year 2019, up from 68 cents in full-year 2018.
Wall Street sell-side analysts forecast that the company will increase its net EPS by 15% every year over the next five years while the S&P 500 is expected to grow its EPS by 6% per year.
Analysts issued an overweight recommendation rating for this stock and have established an average target price of $67.75 per share.
Currently, the share price ($44.19 at close on March 27) is not at its cheapest, as the below Peter Lynch chart illustrates.
SPS Commerce Inc doesn’t pay dividends.
GuruFocus assigned the company a very positive financial strength rating of 7 out of 10 and a high profitability rating of 8 out of 10.
Staar Surgical
The second company to have a look at is Staar Surgical Co (STAA, Financial), a Lake Forest, California-based manufacturer and seller of implantable lenses for the eye and related delivery systems that has a market capitalization of about $1.39 billion.
Staar Surgical Co posted a 172.7% year over year increase in its trailing 12-month EPS without NRI to $3.2 in full-year 2019, up from $2.74 in full fiscal 2018.
Wall Street sell-side analysts forecast that the business will grow the EPS by 30% every year over the next five years.
Analysts also recommend a buy rating for this stock and have established an average target price of $45.80 per share.
The share price ($31.02 as of March 27) currently trades above the Peter Lynch earnings line, as the below chart shows.
Staar Surgical Co doesn’t pay dividends.
GuruFocus assigned the company a very positive financial strength rating of 7 out of 10 and a moderate profitability rating of 4 out of 10.
Perficient
The third company to have a look at is Perficient Inc (PRFT, Financial), a St. Louis, Missouri-based provider of digital consultancy services and solutions in the U.S. with a market capitalization of about $822.95 million.
Perficient Inc saw its trailing 12-month EPS without NRI growing by 57.5% year over year to $1.15 in full-year 2019, up from 73 cents in the full year 2018.
Wall Street sell-side analysts forecast that the company will increase its EPS by 12% every year over the next five years.
Analysts also issued a buy recommendation rating for this stock and have set an average price target of $42.33 per share.
Currently, the share price ($25.02 at close on March 27), which is slightly above the intrinsic value according to the Peter Lynch chart.
Perficient Inc doesn't pay dividends.
GuruFocus assigned a positive rating of 6 out of 10 for the company’s financial strength and a very positive profitability rating of 7 out of 10.
Disclosure: I have no positions in any securities mentioned.
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