In this volatile market under President Trump’s second term, savvy investors are hunting growth names trading at discounts with explosive potential. Today, I’m going to spotlight two under-the-radar gems I think have plenty of upside potential.
These companies are each beneficiaries of solid valuations, sky-high growth trajectories, and catalysts tied to the AI and Telehealth trends in place. Here’s why these two companies look like screaming buys to me right now for investors looking to double their next $10k investment over the course of the next five years.
Zeta Global Holdings
AI-diven marketing cloud giant Zeta Global Holdings (NASDAQ:ZETA) is an absolute beast of a tech stock, and has officially made back all its 12-month losses at the time of writing. This is a company that’s been hit by concerns around software and cloud stocks (namely due to disruption from AI), but as a key integrator of AI within its core platform, this is a company I think could actually be a hidden winner worth considering.
I think the numbers speak for themselves. The company reported a bombshell Q4 report a little more than a week ago, with revenue skyrocketing 25% year-over-year to nearly $400 million. That beat estimates handily, as did EPS (came in at $0.28 versus expectations of $0.24).
With strong full-year momentum implying around 35% growth, ZETA stock is one I think investors aren’t paying enough attention to. That’s in part due to stronger-than-expected operating margins which have improved as the company continues to scale its consumer count.
Additionally, it’s expected that GAAP net income should turn positive this year, meaning the company’s valuation at around 16-times forward earnings is extremely attractive. With a PEG ratio under 1.0 and expected compounded annual growth rate of more than 25% thanks to AI adoption, Zeta is a no-brainer growth stock to consider right now, in my view.
Talkspace (TALK)
Next, let’s dive into Telehealth giant Talkspace (NADSAQ:TALK), and why this company appears poised for some serious stock price appreciation over time.
The Telehealth space is one that’s certainly not for everyone, and it’s had its fits and starts over the years. Of course, the pandemic supercharged growth for companies like Talkspace, though this company (and others) continue to see a continuation of strong growth in the past. That’s somewhat surprised me, but not to a significant degree.
Just how strong has Talkspace’s revenue growth been? Well, during the company’s most recent Q4 report, Talkspae reported revenue growth of nearly 30% (to a still-small $63 million, but growing). Payor sessions surged, as did active members, by almost the same amount.
Perhaps most importantly, though, is the bottom line story for Talkspace. The company saw its net income surge into the black, with the company making a key profitability inflation (positive $5 million). That’s still a small margin, but it highlights the company’s focus on operational efficiency and improving its margins.
With plenty of upside relative to its current valuation, this is a small cap pick I think investors may want to consider with the speculative portion of their portfolios.