Growth stocks were the major drivers of the stock market performance following the mid-March crash. For many technology stocks, the pandemic led to a surge in growth and demand. For many companies, their software was more important to their operations than actual offices…
The SPDR Portfolio S&P 500 Growth ETF (SPYG), which tracks the performance of growth stocks, has gained 18% so far this year. In comparison, the broader S&P 500 has gained 2.5% over this period. This momentum may well go into November and beyond, especially given the fact that there is a strong prediction of the second wave of coronavirus.
Overall, the ability to scale operations is much higher and quicker in the technology sector, leading to higher growth rates. Apart from technology, businesses that are providing essential services are also poised to keep growing.
Twilio, Inc. (TWLO), Zillow Group, Inc. (Z), and Five Below, Inc. (FIVE) have witnessed significant momentum this year because of their offerings and strength in their business models. They are expected to keep gaining in November as consumer spending increases on their products and services.
Twilio, Inc. (TWLO)
TWLO operates a cloud communications platform that allows developers to build and scale communications within software applications. They provide this as a pay-as-you-go service to customers in the United States and around the globe. TWLO’s stock has gained 193.6% so far this year.
TWLO has recently agreed to acquire Segment, a leading customer data platform, for a consideration of $3.2 billion. This move is meant to help TWLO become the world’s leading customer engagement platform. The company has also recently launched Microvisor, which is an IoT connectivity and device management platform that helps with the development of IoT connected devices.
For the third quarter ended September 2020, the company’s total revenue increased 52% year-over-year. The company’s active user accounts also increased by 21% year-over-year.
TWLO’s trailing-twelve-month revenue has grown at a CAGR of 61.6% over the last three years. The company’s forward EBITDA has grown 54.9% compared to the sector average of 7.1%. TWLO is expected to witness revenue growth of 37.1% for the quarter ending December 2020, and 31.5% in 2021. The company’s EPS is estimated to grow at a rate of 20.5% per annum over the next five years.
How does TWLO stack up for the POWR Ratings?
B for Trade Grade
A for Peer Grade
B for Overall POWR Rating
The stock is also ranked #1 out of 11 stocks in the Software – SAAS industry.
Zillow Group, Inc. (Z)
Z operates a real estate and home-information-related marketplace through smartphones and on the web. The company’s platform includes premier agents, new construction, and rentals marketplaces. Z’s stock has gained 100.3% so far this year.
The company has recently made multifamily advertising easier through four-tiered rent packages which consolidate several different marketing solutions. The new solution has been launched after a successful pilot operation in 12 states. From January 2021, the company will be expanding the scope of services available through its Zillow Offers platform allowing customers to work directly with licensed employees of Zillow Homes.
During the second quarter ended June 2020, the company’s consolidated revenue…
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