Not every promising investment opportunity receives widespread attention. Some hidden-gem stocks are relatively unknown until they soar into the spotlight. Micro-caps become large-caps and lead to generational wealth.
Some of these hidden gems are micro-caps, but setting your sights on this cohort presents significant risk. Some hidden gems end up being duds that drag down your portfolio. However, finding hidden gem stocks with multi-billion dollar market caps is possible. Some of these stocks are relatively unknown despite having enthusiasts surrounding them. These are some of the hidden gem stocks that can lead to meaningful portfolio gains.
Duolingo (DUOL)
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Duolingo (NASDAQ:DUOL) is an educational tech company that helps people learn new languages. The company also expanded to offer additional subjects like music and math. The Duolingo mobile app has over 88 million monthly active users, resulting in stellar revenue growth.
The company reported 45% year-over-year revenue growth and $12.1 million in net income. The switch to GAAP profitability and rising profit margins suggest that the stock can deliver enticing returns for long-term investors. Duolingo reported a $13.9 million net loss in Q4 202,2, demonstrating how far the company has come.
Duolingo has a market cap of just below $10 billion. The stock’s main weakness is its P/E ratio, which sits above 600. Duolingo’s 133 forward P/E ratio is more palatable but still leaves something to be desired. Analysts are mixed and rated it as a “Moderate Buy” with a projected 11% upside. Investors worried about the valuation may want to monitor this stock and plan their entry instead of accumulating shares immediately.
Sezzle (SEZL)
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Sezzle (NASDAQ:SEZL) only has a $330 million market cap. It’s a riskier pick due to its size and competition in the fintech industry, but its 47 P/E ratio and financial growth offer reasons to feel optimistic.
The fintech firm is up 176% year-to-date and has comfortably outperformed the stock market. Shares are currently in the middle of a correction, which can lead to more attractive prices.
Sezzle is a “Buy Now Pay Later” company that enables installment payments for everyday purchases. Instead of paying $50 for a product or service, you can make four monthly payments of $12.50. The company has 2.6 million active customers and 307,00e subscribers in Sezzle Premium and Sezzle Anywhere.
The company’s Q4 results were exceptional. Revenue grew by 27.8% year-over-y, while net income soared by 363.4% year-over-year. GAAP net income for the full year 2023 came to $7.1 million. Sezzle offered guidance for $20 million in GAAP net income for 2024. This benchmark represents 181.7% year-over-year growth and makes the fintech stock attractive.
Celsius Holdings (CELH)
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Celsius Holdings (NASDAQ:CELH) is a fast-growing sports beverage company. Expanding internationally should help the company maintain elevated revenue growth rates for several years. Investors were delighted by the company’s Q4 2023 result,s which revealed 95% year-over-year revenue growth. Full-year revenue growth reached 102% year-over-year and reached $1.3 billion.
However, rising revenue isn’t the only perk for shareholders. Celsius Holdings has also been expanding its profits. The firm reported $39.1 million in net income compared to a $28.2 million net loss in the same period last year.
Celsius Holdings is rising on the trend of health-conscious consumers. It’s a healthier alternative to many sports beverages and has generated most of its sales in North America. Out of the corporation’s $1.3 billion in total full-year 2023 revenue, only $54.7 million (0.05 billion) came from international markets. Only 4% of total revenue came from outside of North America. International revenue grew by 52% year-over-year, and expansion into new markets will accelerate growth.
On this date of publication, Marc Guberti held a long position in CELH. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
