Investors looking to supercharge their portfolios would do well to widen the search aperture. Our hunt for the seven best stocks poised for magnificent earnings growth next year brings up names such as Krystal Biotech and RadNet — stocks far less hyped than Nvidia, Meta, Apple or the other megacap leaders that dominate the market.
Some stocks on the list tumbled below key support levels in a turbulent start to August. Many have now recovered their 50-day moving averages and others are trying to recover that key support level.
These Seven Are Poised For Magnificent Earnings Growth
Vertex Pharmaceuticals: Vertex makes products to treat people with serious diseases, including Trikafta for cystic fibrosis. Analysts anticipate Vertex earnings will boom 5,542% next year to $18.68 per share, according to FactSet. That would mark a big comeback for this biotechnology company. On a per-share basis, Vertex earnings are expected to crater in 2024 after a huge loss in the second quarter, tied to the purchase of Alpine Immune Sciences. Top-line growth continues to slow. Vertex stock earns a Composite Rating of 92 and RS Rating of 87, both out of a best-possible 99. It has jumped 18.4% so far this year. Shares were re-testing the 50-day line on Thursday after an early August tumble below that support level.
Many Biotech Companies Among Best Stocks
Sarepta Therapeutics: Sarepta makes treatments for rare disorders. Analysts forecast Sarepta will swing to EPS of $2.07 in 2024, from a sharp loss last year. They expect earnings per share to soar 453% next year as sales surge 82%. Sarepta Therapeutics stock shows a Composite Rating of 92 and RS Rating of 89. The biopharmaceutical play has soared 47% so far this year. Shares tested the 50-day line on Thursday after finding support near the 200-day average earlier in August.
Artivion: The company makes medical devices and implantable human tissues used in cardiac and vascular surgical procedures. Analysts predict Artivion will swing to earnings of six cents a share in 2024, from a net loss per share in each of the prior four years. They project earnings will leap 243% per share next year on 10% revenue growth. Artivion stock holds a Composite Rating of 87 and RS Rating of 90. The medical device maker has bounded 42% higher so far this year. Shares are trying to get back above the 50-day line.
Krystal Biotech: Krystal Biotech develops genetic medicines to treat severe or rare diseases. Its first commercial product, Vyjuvek, targets a genetic skin disorder. Analysts forecast Krystal Biotech earnings will soar 628% per share in 2024, and more than double next year, jumping 131%. Sales are seen increasing 479% and 68% over those respective periods. Krystal Biotech stock shows a Composite Rating of 88 and RS Rating of 96. It has rocketed 60% so far this year. Shares are back above the 50-day line.
The stock trades in relatively low volumes.
GE Vernova Joins RadNet, Tidewater On Best Stocks List
RadNet: RadNet runs diagnostic imaging facilities. The medical company is expected to deliver a big earnings comeback after hiking full-year guidance on Aug. 7. Analysts expect 2024 EPS of 31 cents, after two years of sharp earnings declines. The project earnings will more than double next year, leaping 117% a share, as sales grow 8%. RadNet stock earns a Composite Rating of 90 and RS Rating of 96. It soared on earnings Aug. 8, recovering the 50-day line. RDNT stock has zipped 86% higher so far this year.
Tidewater: Tidewater offers vessels and services to support the offshore oil and gas industry. Analysts forecast Tidewater earnings will more than double in 2024, rocketing 162% per share. Earnings growth is set to jump a further 91% next year. Sales are seen increasing 39% and 20% over those respective periods. Growth is slowing at robust levels. Tidewater earnings exploded 735% in 2023 as sales surged 56%. Tidewater stock shows a Composite Rating of 87 and RS Rating of 81. It has jumped almost 18% so far this year. It remains well below the 50-day line for now after finding 200-day support.
GE Vernova: Spun out as an independent company on April 2, GE Vernova houses the energy assets of the old General Electric. This once-embattled business is seeing end markets recover. GE Vernova has guided growth across business segments, helping it join the best stocks list. Analysts expect earnings of $3.52 per share in 2024 on revenue growth of 4.7%. They see EPS jumping 70% next year on a 5.5% sales gain. GE Vernova stock flourishes a Composite Rating of 78 and RS Rating of 88. Shares have come well off August lows and are now above their 10-, 21- and 50-day moving averages, a positive sign in a recovering market.
Universe of S&P 500, S&P 400 and S&P 600 Stocks
A little background on IBD's process to select the best stocks for magnificent earnings growth:
We began our screening process with the S&P Composite 1500 index, which aggregates the S&P 500, S&P MidCap 400 and S&P SmallCap 600 companies. We chose this index, in part, because it avoids less-liquid, lower-priced and lower-quality names, while efficiently measuring the total U.S. stock market.
Then we limited the stocks on our best stock list to those showing FactSet consensus ratings of overweight or buy, which means analysts expect them to outperform industry peers. Next we further winnowed down the list, setting up a double hurdle: The stocks had to enjoy some of the strongest FactSet earnings growth estimates for the following fiscal year, while also earning high IBD ratings, in terms of their Composite Rating and RS Rating.
The resulting seven best stocks for outsize earnings growth are a quite different set from the Magnificent Seven stocks. At the same time, these stocks are worth watching as much as any of the Mag Seven stocks given their outperformance potential.
To find other ideas for the best stocks to buy or watch, check out IBD Stock Lists and other IBD content.
