Finding cheap growth stocks in today’s changing market offers investors looking for significant returns a strong chance. The main emphasis is the strategic examination of three businesses that exemplify this potential. These companies are frequently disregarded but have solid fundamentals and encouraging growth paths. One of these businesses sticks out due to its exceptional top-line growth and strong position in crucial semiconductor processing solutions. Meanwhile, another company on the list is keeping up with the rapidly growing 5G market by achieving steady revenue growth, holding onto a healthy financial position, and setting itself up for strategic development.
On the other hand, the last company on the list is notable for its inventiveness in biometric authentication technology, which supports its income streams and highlights its ability to withstand cybersecurity attacks. Those looking to take advantage of cheap possibilities must comprehend the subtleties of these firms’ technical advancements, market tactics, and financial health. Analyzing their distinct advantages and market positioning makes it clear why these companies have a lot of upside potential.
ACM Research (ACMR)
ACM Research (NASDAQ:ACMR) leads in semiconductor processing solutions, focusing on single-wafer cleaning and advanced packaging. The company’s sales increased by 105% in the past year to $152.2 million. Single-wafer cleaning showed significant growth in one of the primary categories that drove this spike. Both increased by 199% and 53.2%, respectively, in advanced packaging. Together, these markets generated 83% of ACM’s total revenue. Hence, this indicates the company’s dominant position in the supply of essential semiconductor processing technologies.
Moreover, ACM’s increase in gross margins is one of its strongest points. ACM outperformed its projected range of 40% to 45% with a gross margin of 52.5% against industry volatility. This suggests the company is managing costs well and may have more pricing power for its specialized product offerings. Further, an operating margin of 26.2%, a solid rise over the prior year’s 14.7%, and an operating income of $39.8 million demonstrate operational efficiency. This enhancement proves that ACM can scale its operations with revenue growth.
Overall, fundamentals like rapid top-line growth and gross margin expansion solidify ACM Research’s presence on the undervalued growth stocks list.
Radcom (RDCM)
Radcom (NASDAQ:RDCM) provides solutions for 5G and cloud assurance. The business has seen robust sales growth. In Q1 2024, revenue reached $14.1 million, up 17.5% from the previous year. For the twentieth quarter in a row, revenue has increased annually. Radcom’s capacity to take advantage of industry possibilities is reflected in its steady growth. This is especially true in the 5G and cloud assurance areas. The company’s top-line growth trajectory signifies its market penetration and telecom operators’ growing uptake of its products globally.
Additionally, with $85.3 million in cash by the end of Q1 2024, the company had reached its highest-ever cash levels. Radcom achieved positive income, demonstrating sharp cost control and an operational edge. The first quarter of 2024’s net income of $2.8 million showed a strong profitability plan in the face of rising sales. Indeed, the firm exhibited its capacity to sustain profitability margins while expanding operations and investing in innovation, reflected in its gross margin of 74%.
In short, Radcom’s solid top-line growth, liquidity, and gross margin levels led to its top mark on the undervalued growth stocks list.
Mitek (MITK)
Mitek (NASDAQ:MITK) invests in biometric authentication technologies to counter fraud across various sectors. The business has demonstrated a strong trend for revenue growth. In fiscal Q2 2024, revenue reached $47 million, up 2% from the previous year. New identity products include ID R&D biometrics, MiVIP, and MiPass.
Moreover, they together accounted for 1% of the increase in identity revenue to $17.5 million, the primary driver of this growth. These products maintain nearly 100% gross margins, use software as a service (SaaS) models, and have high margins. Further, MiPass addresses the growing issue of deepfakes and injection attacks. Hence, the company configures many biometric authentication techniques into a single solution. These techniques include facial match, face liveliness, voice match, and voice liveliness.
Looking forward, the biometric authentication industry may expand by more than 10% per year between 2024 and 2032, and its revenue may reach over $60 billion a year in 2032. To conclude, Mitek’s decisive product line, top-line stability, and high market opportunity make it a top choice among the undervalued growth stocks.
As of this writing, Yiannis Zourmpanos held a long position in ACMR. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.