Zacks.com featured highlights include Teradata, Frontdoor, Grand Canyon and Planet Labs
For Immediate Release
Chicago, IL – May 10, 2024 – Stocks in this week’s article are Teradata TDC, Frontdoor FTDR, Grand Canyon Education LOPE and Planet Labs PBC PL.
4 Top-Ranked Stocks with Rising P/E to Bet On
Investors often opt for the stock-picking approach that involves stocks with a low price-to-earnings (P/E) ratio. This strategy is based on the notion that the lower the P/E ratio is, the higher the stock value. The reasoning behind this is straightforward — when a stock's current market price does not adequately reflect its higher earnings, it suggests potential for growth.
But there is more to this whole P/E story. Because not only low P/E, stocks with a rising P/E can also fetch strong returns. In this regard, investors can bet on the likes of Teradata, Frontdoor, Grand Canyon Education and Planet Labs PBC.
Rising P/E: A Useful Tool
The concept is that as earnings rise, so should the price of the stock. As forecasts for expected earnings come in higher, strong demand for the stock should continue to push up its prices. After all, a stock's P/E gives an indication of how much investors are ready to shell out per dollar of earnings.
Suppose an investor wants to buy a stock with a P/E ratio of 30. This means that he is willing to shell out $30 for only $1 worth of earnings as he expects earnings of the company to rise at a faster pace in the future owing to strong fundamentals.
So, if the P/E of a stock is rising steadily, it means that investors are assured of its inherent strength and expect some strong positives out of it.
Also, studies have revealed that stocks have seen their P/E ratios jump over 100% from their breakout point in the cycle. So, if you can pick stocks early in their breakout cycle, you can end up seeing considerable gains.
Just these few criteria narrowed down the universe from over 7,700 stocks to just 27.
Here are four out of the 27 stocks:
Teradata: The Zacks Rank #2 company is a leading provider of connected multi-cloud data platforms. It has evolved from an enterprise database company to an enterprise analytics platform provider. The company was spun off from NCR Corporation in September 2007. You can see the complete list of today’s Zacks #1 Rank stocks here.
Teradata’s analytics platform helps customers integrate and simplify their analytics ecosystem, access and manage data, and use analytics to extract answers and derive business value from data. The average earnings surprise of TDC for the last four reported quarters is 5.18%.
Frontdoor: The Zacks Rank #1 company is the parent company of home service plan brands consisting of American Home Shield, HSA, Landmark and OneGuard.
Frontdoor’s customizable home service plans help customers protect and maintain their homes from costly and unplanned breakdowns of essential home systems and appliances. The average earnings surprise of FTDR for the last four reported quarters is 286.81%.
Grand Canyon Education: This Zacks Rank #2 company is a regionally accredited provider of online postsecondary education services focused on offering graduate and undergraduate degree programs in its core disciplines of education, business and healthcare.
In addition to its online programs, Grand Canyon Education offers programs at its traditional campus in Phoenix, Arizona and onsite at the facilities of employers. The average earnings surprise of LOPE for the last four reported quarters is 10.12%.
Planet Labs PBC: This Zacks Rank #2 company is a provider of global, daily satellite imagery and geospatial solutions.
Planet Labs offers mission-critical data, advanced insights, and software solutions principally to agriculture, forestry, intelligence, education and finance companies. The average earnings surprise of PL for the last four reported quarters is 13.53%.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2271208/4-top-ranked-stocks-with-rising-pe-to-bet-on
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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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Teradata Corporation (TDC) : Free Stock Analysis Report
Planet Labs PBC (PL) : Free Stock Analysis Report
Grand Canyon Education, Inc. (LOPE) : Free Stock Analysis Report
Frontdoor Inc. (FTDR) : Free Stock Analysis Report
