In the evolving market landscape, savvy investors always look for the next big thing—those hidden gems that could transform into tomorrow’s blue-chip giants. While household names like Apple and Amazon dominate headlines, many promising companies remain under the radar, quietly laying the groundwork for massive future growth.
Hence, let’s look at lesser-known, fundamentally sound stocks, Workday, Inc. (WDAY), CrowdStrike Holdings, Inc. (CRWD), and Novavax, Inc. (NVAX), which hold the potential to deliver substantial returns for those who spot them early and could be tomorrow’s blue chips.
The economy rose faster than expected during the second quarter, with consumer spending, business investment, and inventories adding up to the Gross Domestic Product (GDP) growth. GDP increased at a 2.8% annualized rate last quarter, which was double the 1.4% growth in the first quarter. Economists polled by Reuters estimated GDP rising at a 2% rate.
Moreover, the Federal Reserve Chair Jerome Powell recently indicated interest rate cuts ahead, though he didn’t provide exact indications on timing or extent. Investors are focusing on economic data to gauge a soft landing that has helped drive stocks so far this year.
Stocks witnessed gains on Friday after Powell’s comments, with the Dow Jones surging 1.14%, while the Nasdaq Composite rose 1.47% and the S&P 500 gained 1.15%.
Amid an improving macroeconomic backdrop, investors could consider buying under-the-radar stocks such as WDAY, CRWD, and NVAX, which could be future blue-chip powerhouses.
Let’s discuss the fundamentals of the featured stocks in detail:
Workday, Inc. (WDAY)
WDAY provides enterprise cloud applications that help its global customers plan, execute, analyze, and extend to diverse applications and environments to manage their business and operations.
On August 22, WDAY and Equifax Inc. (EFX), a global data, analytics, and technology company, announced a strategic partnership to help modernize the employment and income verification process for Workday customers’ employees.
Matthew Brandt, senior vice president of global partners at Workday, said, “This partnership improves the employee experience by simplifying and speeding up the process by which they secure loans and government benefits, which frees up HR teams to focus on more meaningful work such as employee performance and wellbeing.”
On August 20, WDAY announced the global release of Workday Payroll powered by Strada. The new AI-driven global HR and payroll solution offers organizations a unified view of their finance, HR, and payroll data, enhancing data accuracy, supporting compliance, and informing strategic initiatives that drive business growth and success.
For the second quarter that ended July 31, 2024, WDAY’s revenue increased 16.7% year-over-year to $2.09 billion. Its non-GAAP operating income grew 23% from the year-ago value to $518 million. Its non-GAAP net income per share rose 22.4% from the prior year’s period to $1.75. Its free cash flows were $516 million, up 43.3% year-over-year.
Analysts expect WDAY’s revenue and EPS for the third quarter (ending October 2024) to increase 14.1% and 14.1% year-over-year to $2.13 billion and $1.75, respectively. Moreover, the company surpassed the consensus revenue and EPS estimates in all four trailing quarters.
Shares of WDAY have surged 13.4% over the past month to close the last trading session at $259.95.
WDAY’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
WDAY has an A grade for Growth and a B for Sentiment and Quality. Within the Software – Application industry, it is ranked #22 out of 128 stocks. To see the additional ratings of WDAY for Value, Momentum, and Stability, click here.
CrowdStrike Holdings, Inc. (CRWD)
CRWD offers cybersecurity solutions globally. Its unified platform offers cloud-delivered protection of endpoints, cloud workloads, identity, and data. It provides corporate endpoint and cloud workload security, security and vulnerability management, IT operations management, data protection, security orchestration, and AI-powered workflow automation.
On June 26, CRWD announced that it exceeded $1 billion in total sales over the lifetime of its partnership with CDW Corporation (CDW), a prominent multi-brand provider of IT solutions. CrowdStrike and CDW jointly lead cybersecurity transformation for thousands of organizations globally through the AI-native CrowdStrike Falcon® platform.
On June 18, CRWD partnered with Hewlett Packed Enterprise (HPE) to secure end-to-end AI innovation, including large language models (LLMs), accelerated by NVIDIA Corporation (NVDA). Integrating the Falcon platform with HPE GreenLake cloud and OpsRamp AIOps unifies security and IT teams in monitoring accelerated AI workload IT alerts and adversary activity.
During the first quarter that ended April 30, 2024, CRWD’s total revenue increased 33% year-over-year to $921.04 million. Its gross profit rose 33% from the year-ago value to $696.03 million. Its non-GAAP income from operations grew 71.5% year-over-year to $198.74 million.
Further, non-GAAP net income attributable to CrowdStrike came in at $231.67 million and $0.93 per share, up 69.9% and 63.2% from the prior year’s quarter, respectively. Its free cash flow rose 41.8% year-over-year to $322.46 million.
Analysts expect CRWD’s revenue for the second quarter (ended July 2024) to increase 31% year-over-year to $958.36 million. The consensus EPS estimate of $0.97 for the current quarter reflects a 30.5% year-over-year improvement. Moreover, the company has topped consensus revenue and EPS estimates in each of the trailing four quarters.
CRWD’s stock has gained 6.4% year-to-date to close the last trading session at $271.54.
CRWD’s sound fundamentals are reflected in its POWR Ratings. The stock has an A grade for Growth and a B for Quality. Within the B-rated Software – Security industry, CRWD is ranked #18 out of 23 stocks.
Click here to access additional ratings of CRWD (Value, Stability, Sentiment, and Momentum).
Novavax, Inc. (NVAX)
NVAX is a biotechnology company that promotes improved health by discovering, developing, and commercializing vaccines to protect against serious infectious diseases.
On July 2, NVAX submitted a request for authorization to Health Canada for its 2024-2025 Formula COVID-19 vaccine (NVX-CoV2705) for individuals aged 12 and older.
This filing aligns with the guidance from the National Advisory Committee on Immunization (NACI) to use the latest selected strain and the guidance from the U.S. Food and Drug Administration (FDA), European Medicines Agency (EMA), and the World Health Organization (WHO).
NVAX reported total revenue of $415.48 million in the second quarter that ended June 30, 2024. Its income from operations grew 190.3% from the prior year’s quarter to $161 million. Its net income was $162.38 million, or $0.99 per share, up 179.9% and 70.7% year-over-year, respectively.
Furthermore, as of June 30, 2024, the company’s cash and cash equivalents stood at $680.16 million, compared to $568.51 million as of December 31, 2023.
NVAX’s stock has soared 126.7% over the past six months and 33.1% over the past year to close the last trading session at $11.99.
NVAX’s sound fundamentals are reflected in its POWR Ratings. The stock has a B grade for Value and Growth. It is ranked #56 among 339 stocks in the Biotech industry.
Click here to access NVAX’s ratings for Momentum, Stability, Quality, and Sentiment.
What To Do Next?
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WDAY shares rose $0.05 (+0.02%) in premarket trading Monday. Year-to-date, WDAY has declined -5.82%, versus a 19.19% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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