In the wake of the S&P 500 Index’s ($SPX) worst weekly performance since mid-April, financial services firm BTIG has spotlighted 12 standout stocks poised to excel in the months ahead. By screening for stocks in strong uptrends that are trading close to their 52-week highs, BTIG’s chief market technician, Jonathan Krinsky, believes these 12 picks are set to shine, regardless of whether the market correction persists.
Among BTIG’s top picks, three standout entries are AppFolio, Inc. (APPF), Impinj, Inc. (PI), and Arbutus Biopharma Corporation (ABUS). Each of these three outperforming stock picks has a consensus “Strong Buy” rating from analysts, with room to run higher to Wall Street’s mean price targets. For investors in search of compelling growth stocks in this market, here’s a closer look.
Stock #1: AppFolio
Valued at a market cap of around $8.3 billion, California-based AppFolio, Inc. (APPF) revolutionizes property management and legal practices with its cloud-based software solutions. The company’s platform streamlines leasing, maintenance, and accounting, automating and enhancing everyday tasks, all while integrating top-tier third-party technologies and services.
Shares of AppFolio have climbed almost 28% over the past 52 weeks, outpacing the broader SPX's 19.2% gains over the same period. In 2024 alone, the stock is up 32.2%, compared to the SPX’s 14.5% return on a YTD basis.
Priced at 79 times forward earnings, the stock might not be a bargain, but trades much lower than its own five-year average of 297.45x.
On July 25, the company announced its Q2 earnings results, which exceeded Wall Street’s projections on both the top and bottom lines. AppFolio’s revenue of $197.4 million surged a notable 34% year over year, while the company’s adjusted EPS of $1.14 showcased a staggering 375% annual improvement.
During the quarter, net cash from operations hit $50.9 million, a stunning reversal from last year’s negative $9.2 million. Non-GAAP free cash flow surged to $49.4 million, reflecting a significant leap from just $6.2 million a year earlier.
CEO Shane Trigg said of the Q2 results, “Through adoption of AI, mixed portfolio offerings and more, our customers are transforming the performance of their businesses through our platform.”
For fiscal 2024, management projects revenue to range between $772 million and $778 million. APPF anticipates non-GAAP operating margin for the entire year to range between 23.5% and 24.5%, while non-GAAP free cash flow margin is projected to land between 22% and 24%.
Analysts tracking AppFolio project the company’s profit to climb a staggering 408.8% year over year to $2.90 per share in fiscal 2024, and rise another 38.3% annually to $4.01 per share in fiscal 2025.
Overall, APPF stock has a consensus “Strong Buy” rating. Out of the eight analysts covering the stock, seven recommend a “Strong Buy,” with one “Hold” rating.
The average analyst price target of $279.43 indicates a potential upside of 22% from the current price levels. The Street-high price target of $328 suggests that APPF stock could rally as much as 43.2%.
Stock #2: Impinj
With a market cap of $4.5 billion, Washington-based Impinj, Inc. (PI) powers digital transformation by bridging the gap between the cloud and physical items through its connectivity platform. Using RAIN RFID technology, Impinj helps its partners create IoT solutions that virtualize, analyze, and optimize business operations.
Shares of Impinj have rallied 143.3% over the past 52 weeks and 81.6% on a YTD basis, easily overshadowing the broader SPX’s performance during both periods.
Following the company’s impressive Q2 earnings results after the close on July 24, shares of Impinj climbed 4.4% in the subsequent trading session. In Q2, the company’s revenue jumped a solid 19.2% year over year to $102.5 million, exceeding consensus estimates by 5.2%.
Additionally, the company’s adjusted EPS of $0.83 soared a remarkable 151.5% annually. During the quarter, the company’s adjusted free cash flow hit $44.1 million, marking a significant turnaround from the negative adjusted free cash flow of $28.2 million in the same period last year.
Looking forward to Q3, management projects revenue to range between $91 million and $94 million, while adjusted EBITDA is anticipated to land between $13.8 million and $15.3 million. On an adjusted basis, management forecasts EPS to arrive between $0.46 and $0.50.
Analysts tracking Impinj project the company will swing to a GAAP profit of $0.12 per share in fiscal 2024.
Overall, PI stock has a consensus “Strong Buy” rating. Of the 10 analysts covering the stock, eight recommend a “Strong Buy,” one suggests a “Moderate Buy,” and one has a “Hold” rating.
The average analyst price target of $168.50 indicates a potential upside of just 3% from the current price levels. However, the Street-high price target of $215 suggests that the stock could rally as much as 31.5%.
Stock #3: Arbutus Biopharma
Pennsylvania-based Arbutus Biopharma Corporation (ABUS) is at the forefront of hepatitis B research, using its virology expertise to develop innovative therapeutics aimed at a functional cure for chronic HBV. The company’s pipeline features imdusiran (AB-729), an RNAi therapy showing promising results in reducing surface antigen and boosting immune response, and AB-101, an oral PD-L1 inhibitor currently in early-stage trials.
With imdusiran in three Phase 2a trials and AB-101 in a Phase 1a/1b trial, Arbutus is driving new hope for HBV patients. Valued at around $713 million by market cap, shares of Arbutus have surged 72.8% over the past 52 weeks and 50% on a YTD basis, dwarfing the SPX’s returns during both time frames.
On May 2, Arbutus reported its Q1 earnings results, revealing a sharp revenue drop to $1.5 million from $6.7 million a year earlier. Additionally, the biopharma company’s loss per share held steady at $0.10 year-over-year, matching Wall Street’s bottom line estimate.
On the brighter side, despite the revenue dip and loss during the quarter, the company’s cash reserves and investments in marketable securities grew to $137.9 million as of March 31, up from $132.3 million recorded at the end of fiscal 2023. While Arbutus used $19.3 million in operating activities, this was offset by $21.8 million raised through its at-the-market (ATM) offering program.
Moreover, an additional $22.4 million was secured under this program in April 2024. With an anticipated net cash burn of $63 million to $67 million for fiscal 2024, the company expects its current funds, including recent ATM proceeds, will comfortably support its operations through Q2 of fiscal 2026.
Arbutus is slated to announce its fiscal Q2 earnings results before the market opens on Thursday, August 1. Analysts tracking Arbutus project the company’s loss per share to narrow 11.4% year over year in fiscal 2024.
Overall, analysts' view on ABUS stock is bullish, with a unanimous "Strong Buy" rating from all four analysts in coverage.
The average analyst price target of $4.50 indicates a potential upside of 19% from the current price levels, while the Street-high price target of $5 suggests that ABUS stock could rally as much as 32.3%.
On the date of publication, Anushka Mukherji did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
