HomeMarket NewsSmall but Mighty: An Outburst of Three Stocks Poised for Investor Love

Small but Mighty: An Outburst of Three Stocks Poised for Investor Love

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Investigate how these underdogs are shaking up the market with their exceptional growth strategies

Adobe (ADBE)

Adobe logo on the smartphone screen is placed on the Apple macbook keyboard on red desk background. ADBE stock.

Source: Tattoboo / Shutterstock

Adobe (NASDAQ:ADBE) recently marked a momentous achievement with its first-ever $5 billion quarter in Q4 of 2023, raking in revenue of $5.05 billion, soaring at a 13% YoY growth rate. The company’s fiscal 2023 revenue of $19.41 billion also boasted a 13% annual growth rate.

Amid Adobe’s impressive financial performance lies the strength and diversity of its business segments. For instance, the digital media segment, inclusive of creative cloud and document cloud offerings, remains a primary revenue driver. In Q4, digital media revenue hit $3.72 billion, with a robust 14% year-over-year growth. Of this, creative revenue accounted for $3 billion, witnessing a 12% year-over-year growth, while Document Cloud revenue reached $721 million, signifying a 17% year-over-year increase.

Adobe’s dominance in the digital media segment can be attributed to various factors, including the industry-wide adoption of its Creative Cloud suite and its continuous investment in product advancements. Furthermore, its rapid AI model development has empowered users to create and monetize content more expansively.

Aside from the digital media segment, Adobe’s foray into the cloud business has cemented its revenue growth. Notably, Experience Cloud revenue surged to $1.27 billion in Q4, with subscription revenue growing by 12% year-over-year.

Looking ahead, Adobe anticipates continued growth momentum, setting its fiscal 2024 revenue target within the range of $21.30 billion to $21.50 billion. This bullish outlook underscores the company’s strong market positioning and robust valuation potential.

Salesforce (CRM)

Salesforce (CRM) company logo seen displayed on smart phone. Salesforce Layoffs 2023

Source: IgorGolovniov / Shutterstock.com

Salesforce (NYSE:CRM) racked up revenue of $48.3 billion in remaining performance obligations (RPO) under contract in Q3 of fiscal 2024, reflecting a robust 21% year-over-year growth and underpinning substantial revenue visibility for the upcoming quarters.

Central to Salesforce’s revenue growth is its relentless focus on AI and data cloud innovation, lending to heightened customer adoption. Notably, the Data Cloud platform witnessed stellar performance, ingesting 6.4 trillion records in Q3, marking a staggering 140% year-over-year surge. The introduction of Einstein GPT Copilots has also attracted significant customer interest, with 17% of the Fortune 100 now adopting this product despite its relative novelty.

Besides, Salesforce’s in-depth customer engagement is evidenced by hosting 450 customer events and active participation in initiatives such as Dreamforce, showcasing its customer-centric approach. The company’s emphasis on AI-driven chatbots and internal AI deployment further underscores its commitment to delivering value through its offerings and ensuring customer satisfaction.

Moreover, Salesforce’s leadership in clinching multi-cloud deals, wherein customers adopt multiple Salesforce Cloud products, underscores the strength of its product portfolio. Notably, nine of the top 10 deals in Q3 encompassed six or more clouds, amplifying the integrated solutions and value proposition Salesforce offers across various business functions and verticals.

Lastly, Salesforce’s strategic partnerships, such as those with Amazon (NASDAQ:AMZN) and global management

ExxonMobil’s Strategic Investments and Valuation Growth

ExxonMobil’s Strategic Investments and Valuation Growth

The Company’s Shift Towards Low-Carbon Solutions

Exxon Mobil’s (NYSE:XOM) portfolio solidity and strategic investments are vital fundamentals boosting valuation expansion potential. Solidifying its portfolio in recent years with the divestment of $4 billion of non-core assets and executing two strategic acquisitions, ExxonMobil is poised for value-enhancing growth through access to new opportunities and higher-margin unconventional resources.

Strategic Acquisitions and the Edge in Emerging Markets

The first acquisition accelerates the company’s low-carbon solutions. Meanwhile, the other transforms its upstream business. For instance, the acquisition of Denbury for $4.8 billion in ExxonMobil stock boosts the company’s carbon capture and storage position. This acquisition provides access to a large CO2 pipeline network and storage sites.

On the other hand, the company’s lead in the lithium business with MobilTM Lithium targets to supply lithium for the booming battery and electric vehicle markets. The company may supply lithium for nearly one million electric vehicles annually by 2030. ExxonMobil’s focus on portfolio optimization and strategic investments pushes it to the edge of growth in emerging markets and industry trends. These acquisitions in low-carbon solutions and lithium suggest the company’s focus on diversification and prolonged growth in clean energy technologies.

Financial Strengthening and Record of Dividend Growth

Moreover, ExxonMobil attained a $9.7 billion cumulative structural cost savings in 2023 compared to 2019, exceeding its initial target. The company plans to deliver accumulated savings totaling $15 billion through 2027. The company’s edgy approach to costing includes leveraging tech, optimizing supply chain efficiency, and improving maintenance.

Finally, the company has a solid record of ascending dividends, with a 4% increase declared in Q4. This is marking 41 years of dividend growth (back-to-back). Also, ExxonMobil’s debt-to-capital ratio was at 16%, and its net debt-to-capital ratio stood at 5%. Therefore, this suggests a strong balance sheet and flexibility to support distributions and strategic investments.

On the date of publication, Yiannis Zourmpanos did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.

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