While the Robinhood Trading app has been around since 2013, the company gained notoriety this year as new investors flocked to the app hoping for strong gains during a booming tech-led stock market rally. We get to see the stocks many of their customers are buying as the company publishes a list containing the top 100 popular stocks held by their customers…
Many of them have delivered impressive gains this year, but since 2020 is coming to an end, I thought it would be interesting to go through the list to find stocks that have high growth potential for next year. I did this by focusing on analyst EPS estimates for 2021.
Strong earnings expectations for the full year can sometimes be a precursor for strong price gains. That’s why I focused on established companies, which are covered by more analysts, as opposed to some of the smaller stocks on the list, which may have revenue growth estimates above 2,500%, but haven’t shown positive earnings growth yet. Tesla, Inc. (TSLA – Get Rating), General Electric Company (GE – Get Rating), Walt Disney Company (DIS – Get Rating), and GoPro, Inc. (GPRO – Get Rating) are expected to grow earnings considerably next year, which may lead to substantial gains.
Every investor knows the year TSLA has been having, up almost 700% for the year. The company has a first-mover advantage in the electric vehicle (EV) space with its high range vehicles, superior technology, and an edge in software. The EV industry has been one of the hottest trends in the market this year, led by TSLA.
The stock’s inclusion in the S&P 500 has also played into its strong performance. The stock saw earnings growth of 104.3% in its most recent quarter. EPS growth is expected to grow 5,625% for the full fiscal year. While that ridiculous earnings growth isn’t expected to continue next year, EPS is still forecasted to grow by 67.7% in 2021, well above many other companies in the Robinhood 100.
This growth is expected to be driven by a ramp-up in Model Y production and increased production levels from its Shanghai Gigafactory. TSLA also has two more gigafactories in Germany and Texas in the works. At its recent Battery Day, the company outlined a plan to reduce battery costs by 56% and boost vehicle range by 54%. This will help widen the competitive gap between TSLA and other EVs.
The stock is rated a “Strong Buy” in our POWR Ratings system. It holds a grade of “A” in every component that makes up the POWR Ratings, including Trade Grade, Buy & Hold Grade, Peer Grade, and Industry Rank. It is also ranked #1 in the Auto & Vehicle Manufacturers industry.
It must seem strange to see GE on a list of high growth stocks as the company has struggled in recent years. But, under CEO Henry Lawrence Culp, Jr., who took the reins in October 2018, GE is on a turnaround plan. Culp was brought in to cut costs and streamline the business, and that’s exactly what he’s been doing. The company is also expected to benefit from an improving business environment with the vaccine rollout.
This has led to a…
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