This post includes affiliate links. If you purchase anything through these affiliated links, 247wallst.com may earn a commission.
Among the Wall Street firms investors often pay closest attention to, Goldman Sachs ( NYSE:GS ) has to be atop the list. The investment banking giant has accumulated some of the most impressive talent in its core analyst pool, covering a vast range of companies across varying sectors.
Notably, Goldman Sachs' strategists have also been on the money with their view of where the tech market would be headed in July, predicting a sector rotation that would impact tech stocks and require a deeper dive into other less-explored area of the market when it comes to finding new opportunities.
Goldman hasn't abandoned tech, particularly with interest rate cuts now seemingly a sure thing in the upcoming FOMC meeting next week. But there could be double-digit rallies in a wider range of growth stocks worth considering.
The three companies on this list are from diverse sectors, and certainly make for a rather interesting list of disparate companies to consider investing in. Let's dive into why Goldman Sachs appears to be bullish on these three names.
Key Points About This Article:
- Finding growth stocks that have the potential to truly outperform over the long-term isn't easy, but Goldman Sachs thinks these three companies should be on your list.
- These are three companies from very different industries, providing some compelling options for growth investors seeking diversification right now.
- If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report . It features a software stock we’re confident has 10X potential.
RegenXBio (RGNX)
A gene therapy header showing malignant neoplasms
Among the more intriguing picks that Goldman Sachs has recently highlighted is RegenXBio (NYSE:RGNX), a gene therapy company focused on single-dose treatments for severe diseases. RegenXBio leads in the adeno-associated viruses (AAV) therapeutics market. What this means is that the company uses adeno-associated viruses to deliver modified gene therapies.
RegenXBio currently has three drug candidates. These include the company's notable RGX-121 treatment for Hunter syndrome, which is currently advancing through clinical trials. A Biologics License Application for RGX-121 is expected this year after a pre-BLA meeting with the FDA in June suggested progress was continuing on this front. RegenXBio's RGX-202 drug is aimed at treating Duchenne muscular dystrophy, and is in its Phase I/II trial, enrolling pediatric patients. A pivotal trial is set to start by late Q3 or early Q4. Additionally, RegenXBio, in partnership with AbbVie, is developing ABBV-RGX-314 for retinal diseases, with Phase II data expected in Q3 and regulatory submissions planned for 2026.
These three potential drugs certainly provide investors with plenty to get excited about when it comes to the company's long-term growth prospects. And with RegenXBio recently reporting positive long-term results from its RGX-121 study for treating Hunter syndrome, this is a speculative growth stock that may be getting de-risked as its drug pipeline continues toward eventual approval.
Lululemon (LULU)
A Lululemon sign denoting a company storefront
Lululemon ( NASDAQ:LULU ) is among the high-end retail brands that's seen the most incredible growth in recent decades. Starting off as a niche yoga wear company in 1998, Lululemon has exploded as a top provider of Athletica apparel, footwear, and other accessories as well. Using advanced fabrics and an omnichannel retail strategy, the company is quickly approaching a footprint of 1,000 stores around the world.
A fast-growing stock for a very long time, the company's recent second-quarter report didn't hit the mark for many investors. Lululemon exceeded EPS expectations, but slightly missed revenue targets. Strong international growth and improved margins were offset by weaker sales in the Americas, reflecting solid profitability. However, it's become clear that certain investors are now increasingly concerned about revenue growth, with the stock selling off more than 50% on a year-to-date basis alone. That's a selloff that could pose as a compelling buying opportunity for those looking to take a long-term perspective on this name.
The company's 7% revenue increase in Q2 was certainly much slower than its historical 18% growth for its second quarter, and typical year-over-year growth of around 20%. With momentum slowing, the market is clearly pricing in a lighter multiple.
That said, if Goldman analysts are right and the company can see its revenue growth accelerate higher, this is a stock I think could be very undervalued here at less than 18-times forward earnings .
Alphabet (GOOG)
An Alphabet office building, with the Google logo prominently displayed on the side
Investing in Alphabet ( NASDAQ:GOOG ) has been a winning strategy over the long-term. Over the course of any extended time frame, this is a company that has continued to see strong underlying growth, propelling eventual stock price gains over time. Even when market sentiment is most dour, GOOG stock has remained relatively stable compared to other high-growth peers. Thus, for those concerned about where we are at this point in the cycle, Alphabet certainly seems like a top stock that's worth considering right now.
Goldman analysts continue to remain bullish on the company, partly due to the company's historical track record. On a current valuation basis, there's a lot to like about Alphabet's strong free cash flow (FCF) growth forecasted over the coming year. Goldman analysts have priced in 14% revenue growth and stable operating margins around 32%. At these levels, and assuming Alphabet is able to cut its Capex budget to around $48 billion next year, this is a company that could provide a 31.5% operating cash flow margin. That's simply very difficult to find in today's market.
Indeed, on a valuation and fundamentals basis, GOOG stock remains among my top picks right now, and I'd have to wholeheartedly agree with Goldman analysts on this one.
“The Next NVIDIA” Could Change Your Life
If you missed out on NVIDIA’s historic run, your chance to see life-changing profits from AI isn’t over.
The 24/7 Wall Street Analyst who first called NVIDIA’s AI-fueled rise in 2009 just published a brand-new research report named “The Next NVIDIA.”
Click here to download your FREE copy.
Local News
Comments / 0