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3 Fantastic High-Growth Stocks Analysts are Bullish On

3 Fantastic High-Growth Stocks Analysts are Bullish On

High-growth tech stocks are looking pretty toxic these days. Still, that doesn’t mean analysts don’t some of them. In this piece, I’ll take a look at three hyper-growth stocks — SNOW, DDOG, and ISRG — with solid year-ahead upside potential, according to analysts.

Snowflake is a unique software company in the data-warehousing space. I like to view the firm as the king of the data cloud. With a sophisticated and open platform that helps clients unlock the power of data sets, it’s not too far-fetched to think the Snowflake platform can help clients save money as they shift from growth to tightening. I also think its valuation has come down to a reasonable level. Therefore, I remain bullish on SNOW stock.

Snowflake can help hyper-growth firms supercharge their growth when times are good, and though many companies are in cost-cutting mode, I still think Snowflake can perform better than expected as users leverage the platform to improve operational efficiencies.

Snowflake’s “noisy” usage-based revenue recognition model (rather than subscription-based) could make the big ups and downs of markets much more noticeable. Not to mention that Snowflake stock used to be one of the “priciest” (more like priciest-looking) stocks, with a price-to-sales (P/S) multiple that used to lie in the triple digits at its peak.

Today, Snowflake trades at 25 times sales. For Snowflake, that’s a palatable multiple. However, compared to almost any other hyper-growth company, that’s still a wildly expensive and absurd multiple that suggests further downside.

In an era of high rates, it’s hard to justify such lofty multiples. Nonetheless, I believe Snowflake is one of the firms that still deserves its seemingly hefty price tag. The company’s latest quarter saw revenues soar 67% year-over-year. That’s remarkable growth in this environment, especially when considering currency headwinds. Given that Snowflake’s numbers tend to boom and bust suddenly due to the usage-based model, I’d not be shocked if its growth rate shoots higher on the other side of the recession.

What is the Price Target for SNOW Stock?

After the snowfall could come the melt-up. At least, that’s what analysts think, with their “Moderate Buy” consensus. The average SNOW stock price target of $182.17 implies 26.1% upside potential.

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