With a little patience and a long hold, these three stocks have the potential to grow. Today we give you a builder, a unicorn, and a cloud stock to consider. So without further ado, let’s get started.
Although you have probably heard of Aecom (NYSE: ACM), it might come as a surprise that it is listed in the Fortune 500 as one of the U.S.’s biggest companies. Aecom is an infrastructure company that helped build the One World Trade Center in New York as well as the Mercedes-Benz Stadium in Atlanta. It has a market cap of just over $6 billion at the time of writing and generated $20 billion in revenue for 2019.
In May, its fiscal Q2 earnings saw its EBITDA increase by 16% from the year before to $182 million. In its recent Q3 earnings report, the firm posted $187 million in EBITDA, an 18% increase year over year showing it has continuous growth, even in this current climate. On the other hand, revenue for the quarter did decline 5.1% in comparison from FY Q3 2019, but considering the small matter of a global pandemic perhaps we shouldn’t hold that against them.
Aecom is a pioneer of digital tools that can be used to deepen client engagement; as such they are holding a webcast on the 13th of August to showcase its innovations in this field. Aecom, being already globalized, with offices in China, the Middle East, and across Europe, is well placed to benefit as technological alternatives are developed for more sustainable infrastructure.
Bill.com (NYSE: BILL) is another stock for the automatic payments and B2B transactions sector. It takes both A.R. (accounts receivable) and A.P. (accounts payable) processes and uses them to streamline and automate business payments, reducing time and effort for its clients. With an 82% client retention rate, of whom TED and Community First Bank are included, Bill.com is on the rise.
Despite naysayers back in 2019 telling investors to stay away from this stock, Bill.com has grown rapidly since its IPO back in December. It has repeatedly exceeded expectations on its earnings per share (EPS) by an average of 48.49% and grew from $-0.06 to $-0.04 in its first 2 quarters. Investors in the company seem optimistic as the stock price keeps rising steadily from its IPO price of $35.50 to around $100 at the time of writing — an increase of around 180%. I would give a small warning that investors should keep an eye on its cash burn rate, which increased 57% when comparing its trailing twelve months to its report from June last year. However, it has reduced that percentage down from 65% in 2018. If it can keep revenue growth increasing and continue reducing its cash burn, a little patience with this stock could pay well.
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Additionally, Bill.com achieved unicorn status and a partnership with Mastercard (NYSE: MA) in May last year, a few months after a partnership was made with American Express (NYSE: AXP). Making these deals pre-IPO shows that the focus on AI and automatic payment technology is drawing in bigger names in the industry. Unlike other, more well-known companies that achieved unicorn status, WeWork being the most memorable, this B2B payment company made it to its IPO with no financial scandals of any kind. Although you might not have heard of Bill.com, it is proving to be a brilliantly boring company that has the potential to turn a profit for investors over the next few years.
Workiva (NYSE: WK) is a SaaS global cloud company which connects company data into easy to manage, accessible reports. It has several well-known clients such as TomTom, Barclays (NYSE: BCS), and Keybank — a subsidiary of KeyCorp (NYSE: KEY). It also works with Amazon (NASDAQ: AMZN) and Google (NASDAQ: GOOGL) to provide infrastructure to its clients.
Up until this year, Workiva has seen good revenue growth. With an average increase of 18% per year for the last 5 years. Investors have paid attention to this and as such the share price has increased around 30% each year in response. The company is still not profitable on an annual basis, however, in its recent earnings report, they posted a $0.03 per share profit in Q2 when a loss of $0.15 was expected.
Despite predictions that the company will continue in its trend of unprofitability for the next three years, this company shows an ability to attract attention from larger companies and it has shown steady and stable growth. If the company’s revenue growth continues to rise then more quarters like the most recent one are sure to occur. Investors might just need a little patience if they buy this stock.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.
Contributing Writer at MyWallSt
Poppy’s favorite stock is Nvidia as she loves innovation and this stock has bags of it. Nvidia invented the GPU in 1999 and even today its immersive graphics give life to the gaming world. Poppy is also inspired by Nvidia’s ability to imagine and create positive change for the world, with its AI technology fuelling new developments in the automotive industry, the medical industry, as well as powering data centers around the world.