Investing

4 Top Jefferies Growth Stock Calls All Have Big Potential Catalysts

Match

Jefferies notes that, despite a big run, the stock is cheap compared to competitors. Match Group Inc. (NASDAQ: MTCH) is the worldwide leader in online dating products in terms of revenue, monthly active users and paid members. Its portfolio of dating sites includes several of the most popular products: Match, Meetic, OKCupid, Tinder, POF and Twoo. It has four of the top-five highest-grossing dating apps in North America and three of the top-five worldwide.

With more and more millennials turning to online dating, the prospects for this company remain incredibly strong. Toss in the computer literacy of young Americans, and it makes sense that the stocks in this area would show robust growth. Some top Wall Street analysts feel that as much as a stunning 50% of all dates will begin online by 2022.

The analysts said this:

We were out with a thesis refresh on Match following our meetings with management this week. We continue to forecast sustainable mid-high teen revenue growth and high-30% margins, primarily driven by Tinder and international. We note that the non-Tinder profile remains mixed and expectations are for a softer first half of 2019 and modest growth in the second half of 2019. Bumble and Facebook remain the top competitors, though management noted that they are not seeing any slowdown as a result of competition, with Tinder still at 2x the subs and 3x the rev of Bumble. Our latest first quarter Tinder app ranking checks show that rankings have come in above 2018 quarterly levels, which is consistent with management commentary on the fourth quarter call.

The $64 Jefferies price target compares with the $58.12 consensus target. Shares closed on Tuesday at $56.66.

Tesla

This has been one of the most volatile stocks, and talked about companies, over the past two years, and Jefferies remains positive on the shares. Tesla Inc. (NASDAQ: TSLA) manufactures and sells electric vehicles, particularly its high-end Model S and X, as well as the forthcoming mass-market-oriented Model 3.

Tesla also generates revenue from selling zero-emission vehicle credits to original equipment manufacturers, installing, operating and selling solar energy systems (previously SolarCity), and manufacturing and selling energy storage systems to customers.

The stock has been volatile, and CEO Elon Musk is unpredictable as well. However, the analysts remain positive:

The company reported model production/delivery numbers with overall totals coming in slightly below our estimates and skewing toward M3s. They were unable to keep up with US Model 3 orders but the Model S/X mix (S/X deliveries were 40% below our forecast) is likely to disproportionately hit profitability. If we assume $25,000 gross cash profit per Model S/X, that suggests a $200 million shortfall to our Q1 auto gross profit forecast of $840 million and our group EBIT of -$50 million.

Jefferies has set a $450 price target. The consensus estimate is $316.75, and shares ended Tuesday at $272.31 apiece.

These four companies all offer investors strength in their specific industries and the ability to remain market leaders. Their stocks are suitable for growth accounts with a higher degree of risk tolerance.