Large-cap growth stocks are popular with investors because they strike a balance between risk and return. Given their sizable market share and robust financials, these companies usually withstand both internal and external disruptions well, which can cushion their stock prices in a broader market decline. These stocks tend to be less volatile, with stable earnings and dividends, acting as a safer bet than small- or mid-cap companies.
Many tech stocks have become synonymous with growth stocks in recent years thanks to the solid growth they witnessed based on their innovations and increasing demand for their products and services. The coronavirus pandemic has accelerated the growth for these stocks because technology has become a necessity for individuals and businesses in the “new normal.”
The solid performance of growth stocks is evident in the SPDR Portfolio S&P 500 Growth ETF’s 31.3% returns over the past year.
As the technology sector’s growth is expected to continue with rising coronavirus cases and even after the economy re-engages with the arrival of vaccines, large-cap tech oriented growth companies such as Intuit Inc. (INTU), Autodesk, Inc. (ADSK) and Twilio Inc. (TWLO) should keep thriving.
Intuit Inc. (INTU)
INTU provides financial management and business solutions through three segments: Small Business, Consumer Tax and Strategic Partner. It offers advisory, tax preparation and filing services internationally to consumers and small businesses.
INTU has recently completed its acquisition of Credit Karma, Inc., a consumer technology company, primarily known for providing free credit scores. This acquisition should allow INTU to increase its customer base by approximately 110 million.
To Further grow its customer base, INTU has expanded its tax filing services through TurboTax Live Full Service. The online advisory benefit in multiple languages is expected to help INTU attract a large volume of potential customers.
INTU’s revenues have increased 14% year-over-year to $1.32 billion in the fiscal first quarter ended September 2020. Non-GAAP operating income rose 159% from the year-ago value to $334 million, while non-GAAP EPS increased 129% to $0.94.
Analysts expect INTU’s EPS to rise 12.1% in the current quarter ending December 31, 2020 to $1.30. The company has an impressive earnings surprise history as well. It beat the Street EPS estimates in each of the trailing four quarters. The consensus revenue estimate of $1.95 billion for the ongoing quarter represents a 14.7% rise year-over-year. INTU’s stock gained 44.6% over the past year.
How does INTU stack up for the POWR Ratings?
A for Trade Grade
A Buy & Hold Grade
B for Peer Grade
A for Industry Rank
A for Overall POWR Rating.
The stock is currently ranked #3 of 46 stocks in the Consumer Financial Services industry.
Autodesk, Inc. (ADSK)
ADSK operates as a software design and services company worldwide, offering customers productive business solutions through technology products and services. The company’s services have applications in architecture, engineering and construction, product design and manufacturing, and media and entertainment industries.
Last month, ADSK completed acquisition of Spacemaker for $240 million. This acquisition will provide ADSK with a powerful platform to drive modern, user-centric automation, thereby driving enhancing its demand in the market.
ADSK has also announced a new set of products for Autodesk Construction Cloud — Autodesk Build, Autodesk Quantify and Autodesk BIM Collaborate. This should allow ADSK to strengthen its position in the highly competitive cloud services industry.
ADSK announced plans to introduce a digital twin of its Autodesk Tandem. This will facilitate connecting the digital world with the real world, creating a reflection of a model by bringing project data together from its many sources, formats, and phases.
ADSK’s revenues has risen 14% year-over-year to $952.40 million in the fiscal third quarter ended October 31, 2020. EPS rose 100% year-over-year to $0.60.
Analysts expect ADSK’s EPS to rise 16.3% in the current quarter to $1.07. The company has an impressive earnings surprise history. It beat the street EPS estimates in each of the trailing four quarters. The consensus revenue estimate of $1.01 billion for the fourth quarter represents a 12.3% rise year-over-year. The stock has gained 55.7% over the past year.
ADSK is rated “Strong Buy” in our POWR Ratings system. It has an “A” for Trade Grade and Buy & Hold Grade, and a “B” for Peer Grade and Industry Rank. In 48-stock Software-Business Industry, it is ranked #2.
Twilio Inc. (TWLO)
TWLO is an international cloud-communications Platform-as-a-Service (PaaS) company. The company's platform consists of Programmable Communications Cloud, Super Network and Business Model for Innovators.
TWLO recently acquired Segment, a market-leading customer data platform, for $3.20 billion worth TWLO class A stock. This should help TWLO make its customer experience seamless by providing a personalized, timely, and impactful engagement service across multiple divisions.
In late September, TWLO announced the launch of Microvisor, an IoT connectivity and device management platform that offers embedded developers a place to build connected devices, keeping them secure, and managing them through their lifetime. This will enable Twilio to adapt itself to industry trends and build new IoT solutions faster, with enhanced security and reliability.
TWLO reported third quarter (ended September 2020) total revenue of $448 million, up 52% year-over-year. Non-GAAP EPS increased 33.3% to $0.04. Active customer accounts increased 21% year-over-year over this period.
Analysts expect revenue to grow 37.1% in the current quarter (ending December 2020) to $454.19 million. TWLO’s EPS is expected to rise at a rate of 20.5% per annum over the next five years. The company has an impressive earnings surprise history as well. It beat the Street EPS estimates in each of the trailing four quarters. TWLO’s stock has gained 255.8% over the past year.
It is no surprise that TWLO is rated “Strong Buy” with an “A” for Trade Grade and Buy & Hold Grade, and a “B” for Peer Grade. It is currently ranked #1 out of 11 stocks in the Software - SAAS industry.
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INTU shares fell $0.18 (-0.05%) in after-hours trading Monday. Year-to-date, INTU has gained 40.85%, versus a 14.92% rise in the benchmark S&P 500 index during the same period.
About the Author: Rishab Dugar
Rishab is a financial journalist and investment analyst. His investment approach is to focus on quality stocks, trading at low prices, with business models that he readily understands.3 Large-Cap Growth Stocks to Invest in Right Now appeared first on StockNews.com