Investors seeking opportunities among growth stocks could be interested in the following small caps, as they represent companies whose trailing 12-month net income per share has improved significantly on a year-over-year basis.
Wall Street sell-side analysts have also issued positive recommendation ratings for these stocks.
Bluebird Bio
The first company to consider is Bluebird Bio Inc. (BLUE, Financial), a Cambridge, Massachusetts-based biotechnology company developing transformative gene therapies aimed at being commercialized for serious genetic diseases.
Product candidates for severe genetic disorders include therapies to treat transfusion-dependent ß-thalassemia patients (TDBT), as well as patients with sickle cell disease (SCD) and cerebral adrenoleukodystrophy (CALD).
Though it is still generating a net loss from its ongoing operations, the company's bottom line has improved over the past year. Net loss per diluted share for the trailing 12-month period ended in June, was $7.03, while the net loss for the same period in 2021 was $9.20 per share.
Last week, Bluebird Bio announced the Food and Drug Administration approved its gene therapy, called Skysona, aimed at slowing down the progression of rare neurodegenerative CALD disease in U.S. male patients aged 4 to 17. The product will be commercially available before the end of current year with a list price of $3 million.
In August 2022, the FDA also approved a therapy called Zynteglo for TDBT patients, which cost $2.8 million. TDBT is an inherited blood disorder that causes various problems to the body and internal organs and is life-threatening if left untreated.
The share price ($6.86 per share as of Sept. 20) is down a significant 41.12% year over year, with a 52-week range of $2.86 to $17.85 and a market cap of approximately $529.05 million.
Bluebird Bio does not pay dividends.
On Wall Street, the stock has a median recommendation rating of hold with an average target price of $7.78 per share.
The Vanguard Health Care Fund (Trades, Portfolio) is the company's largest fund holder with 8.59% of its outstanding shares. Tang Capital Management is the second-biggest fund holder with 7.66%, while BlackRock Inc. follows in third with 7.54% of the company's outstanding shares.
Planet Labs
The second stock to consider is Planet Labs PBC (PL, Financial), a San Francisco-based provider of global, daily satellite imaging and geospatial solutions, operating a large fleet of Earth observation imaging satellites. The company provides its services and solutions to more than 800 clients in the fields of agriculture, forestry, intelligence, education, finance and government.
The company is still generating a net loss from its ongoing operations, but the income statement shows signs of improvement. The net loss per diluted share for the trailing 12-month period ended July 30 was 91 cents, while net loss per diluted share for the same period last year was $2.23.
Commenting on the second quarter of fiscal 2023, which ended July 30, Will Marshall, the company's co-founder, CEO and chairman, spoke about metrics like net revenue retention, which measures the same customer sales from one year to the next, from where proof can be derived that the investments are finally bearing fruit.
Looking ahead to full fiscal 2023, Planet expects revenue growth of 38.7% to 44.8% and pro forma gross margin growth of 49% to 51%, but still expects negative pro forma Ebitda to range between $68 million and $60 million. Capital expenditures should be approximately 13% to 15% of revenue.
The share price ($6.10 per share as of Sept. 20) is down 46.26% year over year, with a 52-week range of $3.70 to $11.65 and a market cap of approximately $1.65 billion.
Planet Labs does not pay dividends.
On Wall Street, the stock has a median recommendation rating of buy with an average target price of $9.83 per share.
BlackRock is the company's largest shareholder with 4.55% of outstanding shares. Canada Pension Plan Investment Board is the second-largest fund holder with 2.90% and Capricorn Investment Group LLC is the third-largest fund holder with a 2.69% stake.
