Top Growth Stocks in 2023: Detailed Analyses and Future Forecasts
15 minutes for reading
DraftKings Inc., Opendoor Technologies Inc., Samsara Inc., Royal Caribbean Cruises Ltd., and Crowdstrike Holdings Inc. ranked among the top five growth stocks in 2023. We will delve into the line of business of each of these leading companies, share analysts’ 2024 forecasts, and conduct a technical analysis of their stocks.
What are growth stocks?
It is important to note that growth stocks are securities of companies showing high revenue or earnings growth rates. Such stocks have significant growth potential, driven by the expected remarkable company performance improvement. They are typically found in technology, biotechnology, and healthcare sectors.
Selection criteria for companies:
- The stock is traded on the NYSE and NASDAQ
- The share price exceeds 2 USD
- The companies are not classified as funds
- Their market capitalisation is over 2 billion USD
- The average trading volume for the last 90 days is more than 2 million shares
- The revenue growth rate for 2022 is over 30%
- The company is not involved in mergers or acquisitions at the time of writing
Growth values were determined as the percentage difference between the opening prices on 3 January and the closing prices on 4 December 2023. The market capitalisation of the companies was valid as of the time of writing on 5 December 2023.
1. DraftKings: +218.95%
Founded in: 2012
Registered in: the US
Headquarters: Boston, Massachusetts
Sector: consumer cyclical
Platform: NASDAQ
Market capitalisation: 16.99 billion
DraftKings Inc. specialises in digital sports entertainment and games, with betting services as one of the company’s main business areas. DraftKings Inc. (NASDAQ: DKNG) stock skyrocketed by 218.95% in 2023, from 11.66 USD to 37.19 USD per unit.
Based on the 2022 report, the corporation’s annual revenue increased by 72.87% compared to the 2021 statistics, reaching 2.24 billion USD. Annual net loss decreased by 9.53%, down to 1.38 billion USD or 3.16 USD per share.
According to the Q3 2023 report, revenue for January to September 2023 inclusive rose by 75.74% from the corresponding period of 2022, up to 2.43 billion USD, with a net loss for these months down by 33.28% to 757.52 million USD or 1.64 USD per share.
The Research and Markets report states that the global online gambling market was valued at 65.32 billion USD in 2020, with the potential to reach 128.15 billion USD by 2027 at a compound annual growth rate of 10.11% from 2020 to 2027 inclusive.
Technical analysis of DraftKings stock
Since 16 August 2022, DraftKings Inc. quotes have been moving within an ascending channel. On 3 November 2023, buyers established themselves above the resistance level of 32.55 USD. When preparing this material, the shares underwent a correction after bouncing off the resistance level around 39.00 USD.
It can be assumed that for the potential development of the upward trend, it is essential for buyers to consolidate above the 39.00 USD mark, which could open the way to the next resistance level of 55.00 USD. A rebound from the support level on the RSI may serve as an additional signal in favour of the potential development of a bullish scenario. The price rebounded from this line on 26 October 2023, driving the stock up by more than 49%.
A negative scenario for buyers can be a price drop below 32.00 USD, which could trigger a further price decline to the lower boundary of the ascending channel at 25.50 USD.
Technical analysis of DraftKings Inc. stock*
Analysts’ forecasts for DraftKings stock in 2024
- As StreetInsider reports, investment experts at Argus Research Company rated DraftKings Inc. stock as Buy, with a target price of 46 USD
- Based on the Business Insider data, Truist Financial analysts recommend DraftKings Inc. shares as a buy, with a target price of 45 USD
- According to InvestorPlace, Moffett Nathanson’s specialists assigned a Buy rating for DraftKings Inc. stock, with a 37 USD price target
2. Opendoor Technologies: +188.98%
Founded in: 2014
Registered in: the US
Headquarters: San Francisco, California
Sector: real estate
Platform: NASDAQ
Market capitalisation: 2.26 billion USD
Opendoor Technologies Inc. owns an online platform for buying and selling real estate. From January to early December 2023 inclusive, Opendoor Technologies Inc. (NASDAQ: OPEN) shares soared by 188.98%, rising from 1.18 USD to 3.41 USD.
According to the Q4 2022 report, Opendoor Technologies Inc.’s annual revenue increased by 94.08% compared to the 2021 figures, reaching 15.57 billion USD. Net loss increased by 104.38% to 1.35 billion USD or 2.16 USD per share.
As the Q3 2023 report indicates, the company’s revenue for the first nine months of this year decreased by 52.2% to 6.08 billion USD. Net loss significantly reduced by 80.71% to 184 million USD or 0.28 USD per share.
A decline in Opendoor Technologies Inc.’s revenue in 2023 is likely to be attributed to monetary policy tightening by the US Federal Reserve. The regulator's measures resulted in rising mortgage rates, making real estate less affordable. This led to a sharp decline in demand for residential property purchases and a slow growth in real estate value.
According to Mordor Intelligence research, the global residential real estate market’s valuation in 2023 may reach 10.5 trillion USD and grow to 14.1 trillion USD by 2028 at a compound annual growth rate of 6.07% from 2023 to 2028 inclusive.
Technical analysis of Opendoor Technologies stock
Since 27 December 2022, Opendoor Technologies Inc. quotes have been moving to form a Double Bottom reversal pattern, with the pattern target likely at the 10,00 USD mark. However, buyers must consolidate above 6.05 USD to complete the pattern formation.
At the time of writing, the shares have left the descending corrective channel, which could indicate buyers’ strength. The first signal confirming a potential bullish scenario can be the resistance level breakout on the RSI, but the indicator values are only testing this line for now.
The quotes consolidating below the 2.85 USD mark could be a negative scenario for bulls, suggesting that the price could return to the descending channel boundaries and move to minimum values near 1.00 USD.
Technical analysis of Opendoor Technologies Inc. stock*
Analysts’ forecasts for Opendoor Technologies stock in 2024
According to Fintel:
- Deutsche Bank experts assigned Opendoor Technologies Inc. stock a Hold rating, with a price target of 2.91 USD
- UBS analysts rated the stock as Neutral, with a 2.75 USD price target
- Gordon Haskett specialists upgraded the company’s stock from Underperform to Hold, setting a price target of 2.50 USD
3. Samsara: +173.31%
Founded in: 2015
Registered in: the US
Headquarters: San Francisco, California
Sector: technology
Platform: NYSE
Market capitalisation: 18.55 billion USD
Samsara Inc. develops and sells innovative technology solutions on the Internet of Things (IoT), primarily involving software and hardware for monitoring and managing various enterprise processes. From 3 January to 4 December 2023, Samsara Inc. (NYSE: IOT) stock surged 173.31% from 12.55 USD to 34.30 USD per unit.
Based on the company’s report for Q4 fiscal 2023, ending on 28 January 2023, annual revenue rose by 52.34% compared to the 2022 fiscal year results, reaching 652.55 million USD. Annual net loss decreased by 30.31% to 247.42 million USD or 0.48 USD per share.
According to the Samsara Inc. report for Q3 fiscal 2024, revenue for three quarters of the current financial year increased by 41.88% from 2023, reaching 661.11 million USD. Net loss for this period decreased by 10.56% to 173.35 million USD or 0.33 USD per share.
Mordor Intelligence research suggests that the valuation of the global fleet management solutions market is 24.48 billion USD in 2023. It is expected to reach 52.36 billion USD by 2028 at a compound annual growth rate of 16.42% from 2023 to 2028.
Technical analysis of Samsara stock
Since 9 June 2023, Samsara Inc.’s stock has been moving towards a bearish broadening pattern formation, with the potential pattern target at 21.05 USD. At the time of writing, the shares are testing the upper boundary of the pattern at 34.00 USD.
To confirm the beginning of a potential reversal, sellers must establish themselves below the 30.00 level, which could indicate a breakout of the ascending trendline. A rebound from the resistance level on the RSI could serve as an additional signal confirming the potential development of a bearish scenario. A previous rebound from this line was observed on 5 September 2023, resulting in a price decline of more than 29%.
A negative scenario for sellers could be a price rise above the 38.00 USD mark, which could signal the cancellation of a bearish pattern and lead to the revival of an uptrend with targets over 45.00 USD.
Technical analysis of Samsara Inc. stock*
Analysts’ forecasts for Samsara stock for 2024
- According to TradingView, FBN Securities experts rated Samsara Inc.’s shares as Outperform, with a target price of 30 USD
- Based on the StreetInsider data, Goldman Sachs analysts gave the tech stock a Buy rating, setting a 35 USD price target, while Piper Sandler specialists rated the shares as Neutral, with a target price of 30 USD
4. Royal Caribbean Cruises: +125.98%
Founded in: 1997
Registered in: the US
Headquarters: Miami, Florida
Sector: consumer cyclical
Platform: NYSE
Market capitalisation: 29.29 billion USD
Royal Caribbean Cruises Ltd. is one of the world’s largest cruise companies, owning renowned brands such as Royal Caribbean International, Celebrity Cruises, Azamara, and Silversea Cruises. Over the given period in 2023, Royal Caribbean Cruises Ltd. (NYSE: RCL) stock increased by 125.98% from 50.54 USD to 114.21 USD per unit.
As the Q4 2022 report shows, annual revenue skyrocketed by 477.01% compared to the 2021 results, reaching 8.84 billion USD. Annual net loss for 2022 decreased by 59.02% to 2.16 billion USD or 8.45 USD per share.
According to the Royal Caribbean Cruises Ltd. report for Q3 2023, revenue for January to September 2023 increased by 69.46% from the same period in 2022, reaching 10.57 billion USD. Net profit for this period reached 1.42 billion USD or 5.55 USD per share, while a year ago, the company posted a net loss of 1.66 billion USD or 6.49 USD per share.
Future Market Insights reported that the global travel services market's valuation was 455.02 billion USD in 2023. The figure is projected to reach 1.28 trillion USD by 2033 at a compound annual growth rate of 10.9%.
Technical analysis of Royal Caribbean Cruises stock
Royal Caribbean Cruises Ltd. shares rebounded from the ascending trendline for the third time on 25 October 2023, which might indicate buyer pressure. When writing this article, the quotes attempted to establish themselves above the resistance level of 112.00 USD.
If the price rises above this level successfully, a bullish trend might develop and test the 132.00 USD mark. A rebound from the support line on the RSI could also confirm the development of this favourable bullish scenario.
Buyers might experience a negative scenario if the price drops below 100.00 USD. This might complete a Double Top reversal pattern, with the quotes likely to fall to 48.25 USD.
Technical analysis of Royal Caribbean Cruises stock*
Analysts’ forecasts for Royal Caribbean Cruises stock for 2024
- According to StreetInsider, Citigroup analysts rated Royal Caribbean Cruises Ltd. stock as a Buy, with a price target of 133 USD
- Based on the MarketBeat information, Truist Financial experts gave the cruise company’s shares a Buy recommendation, with a 134 USD price target
- As StreetInsider reports, HSBC Securities specialists assigned a Buy rating to the cruise giant’s stock, with a price target of 115 USD
5. Crowdstrike Holdings: +120.83%
Founded in: 2011
Registered in: the US
Headquarters: Austin, Texas
Sector: technology
Platform: NASDAQ
Market capitalisation: 57.39 billion USD
CrowdStrike Holdings Inc. provides a wide range of cybersecurity services and develops innovative cloud-based solutions for protection against cyber threats. It operates the Falcon platform, which leverages artificial intelligence and detailed analytics to detect and prevent cyber attacks on businesses. Over the period in question, Crowdstrike Holdings Inc. (NASDAQ: CRWD) stock value soared 120.83% from 107.50 USD to 237.39 USD per unit.
In its report for Q4 fiscal 2023, ending on 31 January 2023, CrowdStrike Holdings Inc. announced a 54.4% increase in annual revenue compared to the statistics for the 2022 fiscal year, reaching 2.24 billion USD. Net loss for the 2022 fiscal year decreased by 21.96% to 183.25 million USD or 0.79 USD per share.
According to the Q3 2024 fiscal year report, revenue for the three quarters increased by 37.81% from the same period of fiscal 2023, reaching 2.21 billion USD. Net profit for the nine months amounted to 35.63 million USD or 0.15 USD per share, while a year ago, the company reported a net loss of 135.76 million USD or 0.58 USD per share.
Mordor Intelligence research indicates that the global cybersecurity market’s valuation in 2023 could be 182.86 billion USD in 2023. It is expected to reach 314.28 billion USD by 2028, with a compound annual growth rate of 11.44% from 2023 to 2028 inclusive.
Technical analysis of Crowdstrike Holdings stock
CrowdStrike Holdings Inc. quotes found a foothold above the 200-day Moving Average on 18 May 2023 and exited a long-term descending channel on 28 November 2023. These two signals might reveal the prevalence of an uptrend. When writing this article, buyers continued to test the resistance level around 240.00 USD but had not established themselves above it yet.
On 28 November 2023, the RSI broke the resistance line. If the indicator rebounds from this level later, this might be interpreted as an additional signal for a bullish scenario, possibly triggering a price rise to the next resistance level of 298.00 USD. The negative scenario for buyers might be a price decline under 225.00 USD.
Technical analysis of Crowdstrike Holdings stock*
Analysts’ forecasts for Crowdstrike Holdings stock for 2024
- According to Investing, Stifel analysts rated Crowdstrike Holdings Inc. stock as a Buy, setting the target price of 225 USD
- Based on the WallStreetZen data, Jefferies experts gave the tech stock a Buy rating, with a target price of 225 USD
- According to information from AlSahm, BMO Capital Markets specialists assigned an Outperform rating to Crowdstrike Holdings Inc. stock, with a 238 USD price target
Risks of investing in growth stocks
- Increased volatility: growth stocks can be subject to sharp price fluctuations due to market volatility and investors' expectations of rapid growth.
- Heightened sensitivity to market conditions: these securities can often react more acutely to macroeconomic shifts and industry shifts, potentially leading to sharp changes in their value.
- Overinflated expectations: investors expect rapid growth and high profitability from stocks, and if the securities do not meet these expectations, their prices can decline sharply.
- Competitive environment: growth stocks industries often face intense competition, and the emergence of new players or changes in market dynamics can affect a company’s performance and stock.
- Uncertainty of future growth: since these stocks are valued based on expectations of possible future financial improvement, uncertainty in meeting these expectations may affect their share.
- Changes in interest rates: interest rate increases can make growth stocks less attractive to investors, potentially leading to a decline in their value.
- Risk of mispricing: investors may misjudge a company's growth potential, which could lead to overvaluation of its stock and loss of investment.
FAQ
1. How can I identify growth stocks in the market?
Identifying growth stocks involves looking for companies with strong earnings growth, solid prospects, innovative products or services, and, often, a significant market share in their industry.
2. What is the difference between growth stocks and value stocks?
Growth stocks are characterised by their potential for rapid earnings growth, while value stocks are typically underpriced relative to their intrinsic value and have more stable, established business models.
3. What should investors consider when investing in growth stocks?
Investors should consider the company's potential for innovation, market trends, financial health, and competitive position in the industry. It's also essential to assess the risk tolerance and investment horizon, as growth stocks can be volatile.
4. Can growth stocks lead to high returns?
Yes, growth stocks can yield high returns, especially if the company successfully capitalises on market opportunities. However, the high reward potential also comes with a higher risk of loss.
5. How does market volatility affect growth stocks?
Market volatility can significantly affect growth stocks, as they are more sensitive to market changes. During periods of market uncertainty, growth stocks may experience more substantial swings in price.
6. Are growth stocks suitable for short-term investing?
Growth stocks are generally more suitable for long-term investing due to their volatility and the time the company needs to realise its growth potential. Short-term investing in growth stocks carries a higher risk.
7. How do economic conditions impact growth stocks?
Economic conditions, like interest rates, inflation, and economic growth, can significantly impact growth stocks. Favourable economic conditions typically benefit growth stocks, while downturns can negatively affect them.
* – Past performance is not a reliable indicator of future results or future performance.
The material presented and the information contained herein is for information purposes only and in no way should be considered as the provision of investment advice for the purposes of Investment Firms Law 87(I)/2017 of the Republic of Cyprus or any other form of personal advice or recommendation, which relates to certain types of transactions with certain types of financial instruments.
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