Investing

4 Top Jefferies US Growth Stocks to Buy Now

PayPal

This company was spun off from eBay recently and many on Wall Street think the real growth is in the payment sector. PayPal Holdings Inc. (NASDAQ: PYPL) operates as a technology platform company that enables digital and mobile payments on behalf of consumers and merchants worldwide. It enables businesses of various sizes to accept payments from merchant websites, mobile devices and applications, as well as at offline retail locations, through a range of payment solutions across the company’s payments platform, including PayPal, PayPal Credit, Venmo and Braintree products. The company’s platform allows customers to pay and get paid, withdraw funds from their bank accounts and hold balances in their PayPal accounts in various currencies.

The Jefferies team thinks that revenue growth of 16% over the next five years is possible and the scarcity value, or lack of competition, could help drive the multiple for the company. The analysts also pointed the new acquisitions PayPal has made, like Venmo and Paydiant, that are leveragable. They also think that the eBay separation is likely to help the company’s positioning with large merchants.

ALSO READ: 7 Analyst Stock Picks Under $10 With Huge Upside Calls

Jefferies initiates coverage with a Buy rating and a $44 price target. The consensus price objective is $43.48. The stock closed on Friday at $38.70.

Twitter

The stock was hammered again after recent earnings and user numbers came in below expectations. Twitter Inc. (NASDAQ: TWTR) is either a total value tech buy or caught in a death spiral, depending on who you ask on Wall Street. High multiple valuations, issues with the ongoing search for a new CEO and overall terrible negative market sentiment has trampled the stock and made it a favorite target of short sellers.

The Jefferies team remains positive on the stock and cite the fact that monetization was strong, with revenues better than some estimates. The problem is the company added only 2 million core monthly active users (MAU), and also said that it does not expect to see meaningful growth in MAUs for a considerable time. That brought the stock market hammer. The analysts are bullish on long-term users and what they call “engagement improvement.” It is also important to remember that the Google traffic partnership is a catalyst that still lies in front of the stock.

The Jefferies price target for the stock is a whopping $56, and the consensus target is a much lower at $41.39. The stock closed on Friday at $31.09, down over 15% last week.

ALSO READ: 5 Analyst Stock Picks From July That Could Double

The Jefferies calls are part contrarian and part sheer growth. All four make sense, but for the more contrarian ideas, they should really only be bought by aggressive accounts with a big tolerance for volatility.