PTGX - 3 Growth Stocks No One Is Watching (But They Should Be)

2024-07-11 06:00:00 ET

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Larger-capitalization enterprises command exceptional predictability with their businesses. They’re often storied franchises with globally recognizable brands that people consume on the regular. Investors love them because it’s usually easily to forecast how they’ll perform in the future. But when it comes to overlooked growth stocks , predictability goes out the window.

Now, what goes in the window is greater potentiality. That’s the balance, the ying-yang if you will of the market. If you want the highest magnitude of predictability, you generally must sacrifice potentiality. And the reverse is usually true too. If you want gargantuan upside, you must sacrifice the confidence that comes with predictable entities.

Frankly, extreme growth-oriented enterprises are not for everyone. They’re highly risky – that’s why they were overlooked in the first place. If they weren’t risky, guess what? They wouldn’t be overlooked. If you can handle the very real threat of volatility, this space just might be for you. Below are overlooked growth stocks to consider.

Flywire (FLYW)

Based in Boston, Massachusetts, Flywire (NASDAQ: FLYW ) operates in the infrastructure software space. Together with its subsidiaries, Flywire operates a payments enablement and software enterprise in the U.S. and international markets. It features a payment platform and network, along with vertical-specific software to help clients with their transactional needs. Mainly, the company serves the education, healthcare, travel and business-to-business (B2B) sectors.

Financially, what makes Flywire an enticing play among overlooked growth stocks is the ample opportunity to run. I’m not guaranteeing anything to be clear. However, the market prices shares at 4.61X trailing-year revenue. Why is that important? Between the first quarter of 2023 to Q1 2024, the average revenue multiple stood at 9.15X.

In my opinion, what that means is that the market previously accepted FLYW stock at an average price-to-sales ratio of 9.15. Therefore, at 4.61X, it has room to run – it could grow into its prior valuation. In fact, analysts are projecting exactly that.

Sales are forecasted to hit just under $497 million by year’s end. If so, that’s 23.2% up from last year. That makes FLYW one of the overlooked growth stocks to consider.

DHT Holdings (DHT)

One of the highest-risk ideas available, DHT Holdings (NYSE: DHT ) is really not for the faint of heart. Technically, the company falls under the oil and gas midstream segment of the value chain. This deals with the transportation and storage of energy-related commodities. Primarily, DHT owns and operates crude oil tankers . Given the geopolitical environment, the shipment of energy resources should see increased demand.

It’s a bit of a cynical play but with the global framework, it’s difficult to ignore the potential upside here. Although the company has been underperforming in terms of earnings per share, in Q1 2024, DHT matched the 29-cent target that analysts were anticipating. Also, the equity trades hands at 3.03X trailing-year sales. In the past year, this metric stood at 3.14X.

So, it’s slightly undervalued but that’s not the whole story here. Instead, investors should consider the business expansion potential. For fiscal 2024, analysts are targeting revenue of $478.48 million. That’s up 22.6% from the prior year’s tally of $390.41 million. In the following year, sales may rise another 19.2% to $570.23 million.

DHT also offers a forward yield of 10.77%. It’s risky but man is it tempting.

Protagonist Therapeutics (PTGX)

Based in Newark, California, Protagonist Therapeutics (NASDAQ: PTGX ) falls under the biotechnology camp. Specifically, the company develops peptide-based drugs for hematology and blood disorders . As well, it focuses on inflammatory and immunomodulatory diseases. Presently, the company is developing a drug called Rusfertide, an injectable therapeutic for the treatment of polycythemia vera and similar blood disorders.

What makes Protagonist stand out is the financials. Although it’s one of the overlooked growth stocks – and thus carrying a high-risk, high-reward profile – the company managed to deliver an average EPS of 61 cents. That contrasts with the expected loss of five cents per share during the same period. Therefore, the earnings surprise came out to an impressive 438%.

Now, what’s also intriguing is that PTGX stock trades at 6.57X trailing-year sales. However, in Q1 earlier this year, the metric averaged over 27X. Theoretically, then, PTGX is trading at an extreme discount. It’s possible that it could grow into its prior valuation.

Sure enough, that’s what analysts are expecting. They’re targeting fiscal 2024 revenue to hit just under $275 million. That’s up over 358% from the prior year’s haul of $60 million.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines .

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