During stock market ups and downs, identifying the next big players breeding massive value growth potentials is similar to finding a pearl in a vast ice lake. Among the multitude of options, certain market giants stand out; they are ready to embark on monumental rallies.
These companies are strategically edging themselves for an unparalleled lead. They are armed with magna fundamentals and visionary strategies. Understanding these stocks’ underlying factors and potential becomes imperative to capture the upcoming massive returns.
With its ambitious forward plan, the first one targets redefining the operational edge and solidifying profitability, setting the stage for remarkable valuation growth. Meanwhile, the second one continues to lead the digital payments space, leveraging its massive transaction volume and innovative portfolio to solidify its market position. Finally, the third one is a frontrunner in HIV treatment and oncology. This holds edgy revenue growth and a potent pipeline, suggesting its potential for rapid valuation expansion.
Read more to learn about these giants’ strategic initiatives, performance, and market lead. Know why these stocks to buy’ may have monumental return rallies.
Stocks to Buy: Goodyear (GT)
Goodyear (NASDAQ:GT) is strategically capitalizing on its fundamental strengths to derive valuation growth potential. The company is focused on elevating its cost structure and operational edge (Goodyear Forward Plan). The plan targets achieving sustainable operational margins of 10% and reducing net leverage to 2-2.5x by the end of 2025.
Additionally, Goodyear aims to bolster its performance and flexibility. The plan includes initiatives to generate $350 million in savings annually and announced restructuring actions totaling $750 million. Hence, these efforts highlight Goodyear’s edge to attain boosted profitability.
Despite market adversities, Goodyear remains resilient, as observed in its market share stabilization. Notably, the company normalized replacement market share in the US, reflecting a more stable performance trajectory. Additionally, through restructuring efforts, Goodyear has been shielding market share losses in Europe, particularly for imported budget brands, since 2019. This strategic response aligns with the company’s focus on maintaining competitiveness and capturing growth trends in key markets.
Financially, Goodyear maintains a solid outlook, with a run rate of $1.4 billion in segment operating income (SOI) exiting Q4 2023. Beyond adjustments for inflation and other macro headwinds, the company’s guidance reflects investment in new programs. This can be observed in a planned $1.2-1.3 billion CapEx. Moreover, there is a phased approach to restructuring, with specific targets for each year ($300 million in 2024, $350 million in 2025). This ensures a clear roadmap for execution and tracks progress.
Overall, Goodyear holds strong fundamentals, focusing on cost optimization and market share stabilization. Hence, these developments may bring considerable ascent in its market valuation.
PayPal (PYPL)
PayPal’s (NASDAQ:PYPL) revenue growth and massive transaction volume indicate its strong market position and ability to capture and retain a considerable share of the world’s payment ecosystem. The company’s performance in Q4 2023 and for 2023 indicates its adaptability against macro-adversities.
In Q4 2023, PayPal had 9% revenue growth, reaching a total payment volume (TPV) of $410 billion. Furthermore, 2023 revenue growth of 8% demonstrates sustained momentum and the ability to derive top-line growth across uncertain economic conditions.
Furthermore, PayPal’s record transaction volume is reconnecting the widespread adoption of its portfolio. With total payment volume hitting $1.5 trillion in 2023, PayPal can facilitate billions of transactions securely. Hence, this high transaction volume generates mega revenue, solidifying PayPal’s edge in the digital payments industry.
One of PayPal’s fundamental strengths lies in its branded checkout solutions. There is constant growth in global branded checkout volumes. The 5% increase in branded checkout volumes in Q4 and the 6% growth for 2023 suggest the role of PayPal’s checkout experience in determining user engagement and conversion rates.
At the bottom line, PayPal’s non-GAAP operating margin expanded in Q4, increasing by 0.40% to 23.3%. Similarly, the 2023 operating margin increased by 1.1% to 22.4%, driven by solid operating expense leverage. This improvement in operating margin reflects the company’s focus on cost discipline and operational edge. Thus, by continuously optimizing its cost structure, PayPal may expand its operating margins and uplift its EPS. Overall, these bottom-line improvements will decisively push PayPal’s market valuation upward.
Gilead Sciences (GILD)
Gilead Sciences’ (NASDAQ:GILD) lead position in the HIV segment is a fundamental strength, boosting possible rapid valuation growth. The solid performance of Gilead’s HIV portfolio, with sales increasing by 6% year-over-year (to $18.2 billion) for 2023, Biktarvy, one of Gilead’s main HIV drugs, experienced solid double-digit year-over-year growth of 14%. Its annualized revenues breached $12 billion. Notably, Biktarvy’s market share in the U.S. reached approximately 48%, demonstrating Gilead’s edgy position in the HIV treatment market.
Fundamentally, Gilead’s strong market dominance in HIV is based on multiple factors. It includes the efficacy of its products, established brand reputation, physician preference, and patient adherence. Moreover, there is continuous product innovation and the introduction of new therapies within the HIV segment, such as lenacapavir, for HIV prevention. These developments further solidify its competitive position and prospects. The company’s HIV portfolio includes daily, weekly, three-monthly, and twice-yearly dosing regimens. Thus, these regimens lead to diverse patient demand and boost its market penetration and top-line growth potential.
Moreover, Gilead’s oncology segment has been a core driver of its rapid valuation growth. It is fueled by product innovation, portfolio expansion, and pipeline expansion. The leading growth in Gilead’s Oncology business, with sales hitting beyond $3 billion on an annualized run-rate basis. Trodelvy, a main drug in Gilead’s oncology portfolio, attained sales of over $1 billion in just three years, indicating strong market acceptance and growth.
Finally, Trodelvy has a clinical profile as the only TROP2-directed antibody-drug conjugate available across multiple tumor types. As a result, this has contributed to its rapid adoption within the healthcare market. Therefore, Gilead’s focus on advancing cell therapy treatments, such as Yescarta, enhances its oncology portfolio and overall valuation growth possibilities.
As of this writing, Yiannis Zourmpanos held a long position in PYPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.