Zacks Investment Ideas feature highlights: SharkNinja, KT and The Progressive
For Immediate Release
Chicago, IL – September 19, 2024 – Today, Zacks Investment Ideas feature highlights SharkNinja, Inc. SN, KT KT and The Progressive PGR.
3 Underfollowed Stocks with Unstoppable Momentum
Activity in the stock market over the last three months has been marked by a notable rise in volatility and a flat performance from the broad market. However, by using the Zacks Rank, and looking beneath the surface, investors may be able to find big winners regardless of the market environment.
Below I have highlighted three stocks with top Zacks Ranks that have massively outperformed the market over the last three months and enjoy catalysts for further price appreciation. SharkNinja, Inc., KT and The Progressive all boast upward trending earnings revisions, reasonable valuations and strong momentum among other factors.
SharkNinja, Inc: Non-Stop Stock Momentum
SharkNinja is a leading home appliance and consumer goods company known for its innovative and high-quality products. It operates two main brands: Shark, which specializes in vacuum cleaners, steam mops, and other floor-care solutions, and Ninja, which offers kitchen appliances like blenders, air fryers, and coffee makers.
The company has built a strong reputation for creating products that combine cutting-edge technology with user-friendly design, catering to a broad range of consumers. SharkNinja has grown rapidly, becoming a prominent player in the global home appliance market.
SharkNinja has experienced a strong earnings revision trend over the past year, as its stock price surged from $30 to $100. The company currently holds a Zacks Rank #1 (Strong Buy), signaling its solid earnings momentum. Analysts have been consistently revising their estimates upward, with earnings projections for the current year increasing by 10.7% and next year's estimates rising by 11.6%.
Additionally, earnings per share (EPS) are expected to climb by 31.4% this year to $4.23 per share and 13.9% next year to $4.81 per share.
SharkNinja is currently trading at 26.6x forward earnings, reflecting its strong stock price appreciation over the past year. Despite the impressive rally from $30 to $100, the stock remains valued near the market average, making it relatively attractive compared to other growth stocks. What makes SharkNinja even more compelling is its projected annual EPS growth of 17.5% over the next 3-5 years, positioning the company as a standout opportunity for investors seeking both value and robust long-term growth potential.
KT: Cheap Valuation and Heft Dividend
KT is South Korea's largest telecommunications company, providing a wide range of services including mobile, broadband, and fixed-line communications. Formerly known as Korea Telecom, the company plays a key role in the country's tech infrastructure, offering advanced 5G services and expanding into digital platforms, AI, cloud computing, and media content.
KT is a leader in innovation within the telecom sector and has been pivotal in South Korea’s digital transformation, with a focus on smart city development and next-generation communication technologies.
Although KT doesn’t not have as much analyst coverage as most domestic stocks, it still boasts a Zacks Rank #1 (Strong Buy) rating. Even more notable is its recent stock price action. In the chart below we can see the KT share price has been trading sideways for more than two decades. But now it is approaching its 20-year high, and it has the wind in its sails. KT is expected to grow its EPS 11.3% annually over the next three to five years and currently sits in the Top 10% (24 out of 250) of the Zacks Industry Rank.
KT Corp is trading at a forward earnings multiple of 8.4x, which is below its 10-year median of 9.6x, signaling a potential value opportunity. The stock also has an attractive PEG ratio of 0.75, driven by its forecasted annual EPS growth of 11.3%, indicating strong growth at a reasonable price. Additionally, KT offers a solid 3.8% dividend yield and has raised its dividend by an average of 13.7% annually over the last five years, though it did lower the payment by 3.3% in the past year. This combination of value, growth, and income makes KT appealing for long-term investors.
The Progressive: One of the Best Stocks in the Market
The Progressive is one of the largest auto insurers in the United States, specializing in vehicle insurance for cars, motorcycles, boats, and RVs. Founded in 1937, Progressive is known for its innovative approach to insurance, offering usage-based policies through its Snapshot program, which tailors premiums based on driving behavior.
In addition to auto insurance, the company provides home, renters, and commercial insurance. Progressive is recognized for its direct-to-consumer model, competitive pricing, and strong customer service, making it a major player in the U.S. insurance market.
The Progressive Corporation holds a Zacks Rank #1 (Strong Buy) rating, driven by a strong earnings revisions trend that has been climbing since last summer, alongside a stock price that has more than doubled. In the past two months, current quarter earnings estimates have surged by an impressive 24.4%, with FY24 estimates up 7% and FY25 rising by 6%. Furthermore, Progressive's sales are projected to grow 19.7% this year and 14.2% next year, signaling robust top-line growth to complement its earnings momentum.
PGR is currently trading at a one-year forward earnings multiple of 20.8x, which is above its 10-year median of 17.2x but still below the broader market average. Despite the stock's significant rally over the past year, its PEG ratio remains particularly attractive at 0.73, reflecting EPS growth forecasts of 27.3% annually over the next three to five years. I have been highlighting these exact catalysts for nearly a year and they are just as true today as they were six months ago.
Should Investors Buy SharkNinja, KT, or Progressive?
Each of these companies offers a compelling investment case with strong momentum, earnings growth, and favorable valuations. SharkNinja has benefited from a surge in its stock price and upward revisions in earnings, yet still trades at a reasonable valuation considering its growth potential.
KT provides an attractive value opportunity with its low earnings multiple and solid dividend yield, while Progressive continues to be a standout in the insurance sector with strong earnings growth and a PEG ratio that remains compelling even after its stock rally.
For investors looking for stocks with a combination of upward momentum, solid earnings revisions, and strong growth prospects, SharkNinja, KT, and Progressive each offer unique opportunities in different sectors, making them attractive additions to a diversified portfolio. Whether seeking growth, value, or a mix of both, these underfollowed stocks are worth serious consideration.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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KT Corporation (KT) : Free Stock Analysis Report
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SharkNinja, Inc. (SN) : Free Stock Analysis Report