In the fast-paced investing world, the most promising opportunities often lie beneath the radar. While headlines tend to spotlight the high-flying tech giants or the latest market sensations, several stealthy stocks quietly accumulate value, positioning themselves for significant gains.
These hidden gems are poised to deliver substantial upside potential as they continue to execute their growth strategies and capitalize on emerging market trends. So, it could be wise to invest in stealthy stocks MGM Resorts International (MGM), UiPath Inc. (PATH), and GigaCloud Technology Inc. (GCT) with massive upside potential.
The U.S. job growth slowed more than expected in July, and the unemployment rate surged to 4.3%, fueling fears of a broader economic slowdown. Nonfarm payrolls rose by 114,000 for the month, down from 179,000 in June and below the Dow Jones estimate of 185,000. However, annual inflation dipped below 3% in July for the first time since 2021.
Easing inflation is a relief to investors anticipating a Federal Reserve interest rate cut next month, as a sense of unease has gripped Wall Street following signs of a cooling labor market. Moreover, economic activity in the U.S. was stronger than expected in the second quarter, driven by a solid consumer, government spending, and a sizeable inventory build.
The personal consumption expenditures (PCE) price index increased by 2.6% for the second quarter, down from a 1.4% rise in the first quarter. Economists surveyed by Dow Jones estimated growth of 2.1%.
According to Treasury Secretary Janet Yellen, the GDP report is “affirming the path we’re on to steady growth and declining inflation.”
Amid this macroeconomic backdrop, explore stocks MGM, PATH, and GCT currently flying under the radar. These companies, each operating in distinct sectors, have shown strong fundamentals, innovative approaches, and strategic advantages that set them apart from their peers.
Let’s discuss the fundamentals of the featured stocks in detail:
MGM Resorts International (MGM)
MGM owns and operates casinos, hotels, and entertainment resorts internationally. The company operates through three segments: Las Vegas Strip Resorts; Regional Operations; and MGM China. Its customers include premium gaming customers, leisure and wholesale travel customers, business travelers, and group customers, such as conventions and trade associations.
On August 15, MGM and Grupo Globo, Latin America’s leading media group, announced a new venture to seek a sports betting and iGaming license in Brazil. If the license is approved later this year, the venture will launch in Brazil in early 2025 under the BetMGM brand, offering a responsible and top-tier betting platform to one of the world’s fastest-growing regulated markets.
The new BetMGM-branded venture in strategic alliance with Grupo Globo will allow MGM to quickly enter the market with the scale and expertise required to establish an early foothold as a prominent operator and provider of the best experience to customers across Brazil.
For the second quarter that ended June 30, 2024, MGM’s casino revenues were $2.21 billion, up 13.4% year-over-year. Its total revenues increased 9.8% year-over-year to $4.33 billion. Its operating income rose 14.6% from the prior year’s quarter to $425.66 million. Furthermore, its adjusted EPS grew 45.8% from the year-ago value to $0.86.
Analysts expect MGM’s revenue and EPS for the fiscal year (ending December 2024) to increase 7.4% and 3.9% year-over-year to $17.36 billion and $2.77, respectively. Moreover, the company surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.
Over the past three months, the stock has plunged 4.7% to close the last trading session at $39.40. However, MGM’s 12-month price forecast of $55.67 indicates an upside potential of 41.3%.
MGM’s sound fundamentals are reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
MGM has a B grade for Value. It is ranked #14 among 25 stocks within the B-rated Entertainment - Casinos/Gambling industry.
To see the additional ratings of MGM for Quality, Growth, Momentum, Stability, and Sentiment, click here.
UiPath Inc. (PATH)
PATH provides an end-to-end automation platform that offers a diverse range of robotic process automation (RPA) solutions, primarily in the U.S., Romania, the United Kingdom, and the Netherlands.
On July 2, UiPath introduced new features in its platform which infuse GenAI deeply into the UiPath Business Automation Platform™ to help businesses achieve better outcomes with AI and automation. The company fulfills the promise of AI-powered productivity with the launch of UiPath Autopilot™ for developers and testers. These innovations should bode well for the company.
In May, PATH announced an integration between the UiPath Business Automation Platform and Microsoft Copilot for Microsoft 365. This collaboration will allow joint customers to automate more knowledge work and improve end-user experiences with UiPath. Microsoft Azure remains a preferred cloud platform for UiPath, including UiPath Automation Cloud™.
During the first quarter that ended April 30, 2024, PATH’s total revenue increased 15.7% year-over-year to $335.12 million. Its non-GAAP gross profit rose 13.7% from the year-ago value to $288.21 million. Its non-GAAP net income and net income per share were $73.22 million and $0.13, up 14.8% and 18.2% from the prior-year quarter, respectively.
Street expects PATH’s revenue for the second quarter (ended July 2024) to increase 5.7% year-over-year to $303.67 million. The consensus revenue estimate of $1.41 billion for the fiscal year ending January 2025 indicates an improvement of 7.7% year-over-year. Moreover, the company topped consensus revenue and EPS estimates in all four trailing quarters.
PATH’s stock has gained 2.5% over the past five days and marginally over the past month to close the last trading session at $12.09. Further, the stock’s 12-month price forecast of $15.62 indicates an upside potential of 29.2%.
PATH’s POWR Ratings reflect its promising prospects. The stock has a B grade for Quality. It is ranked #12 out of 18 stocks in the A-rated Software – SAAS industry.
Click here to see the additional POWR Ratings for PATH (Sentiment, Growth, Value, Momentum, and Stability).
GigaCloud Technology Inc. (GCT)
GCT offers end-to-end B2B e-commerce solutions for large parcel merchandise. It provides GigaCloud Marketplace, which integrates product discovery, payments, and logistics tools into one platform. Its marketplace connects manufacturers in Asia with resellers in the U.S., Asia, and Europe to execute cross-border transactions across furniture, home appliances, and more.
On April 30, GCT announced that its global fulfillment network exceeded 10 million square feet of total space after the signing of a new lease in Ontario, California. This expansion bolsters GigaCloud’s capacity to support the continued growth of its B2B marketplace and deliver enhanced fulfillment services to its B2B marketplace participants.
On April 4, GCT launched its industry-first service, “Branding-as-a-Service” or “BaaS,” which is designed to improve the competitiveness of furniture suppliers, where the GigaCloud BaaS Program selects and allows sellers in the B2B GigaCloud Marketplace to sell products under one of the leading American furniture brands, Christopher Knight Home.
GCT’s total revenues increased 103.1% year-over-year to $310.90 million in the second quarter that ended June 30, 2024. The company’s gross profit grew 89.1% from the year-ago value to $76.40 million. Its adjusted EBITDA came in at $42.70 million, up 71.5% from the previous year’s quarter.
In addition, the company’s adjusted EPS rose 68.9% year-over-year to $1.03. Its cash, cash equivalents, restricted cash, and investments were $209.70 million as of June 30, 2024, compared to $184.20 million as of December 31, 2023.
Analysts expect GCT’s revenue and EPS for the third quarter (ending September 2024) to increase 58.3% and 21.5% year-over-year to $282 million and $0.72, respectively. Further, the company surpassed consensus revenue estimates in each of the trailing four quarters.
Shares of GCT have surged 20.9% year-to-date and 75.7% over the past year to close the last trading session at $22.12. Additionally, the stock’s 12-month price forecast of $59.50 indicates an upside potential of 169%.
GCT’s solid outlook is reflected in its POWR Ratings. The stock has a B grade for Momentum and Value.
Within the Technology – Services industry, GCT is ranked #26 out of 75 stocks. Click here to access additional ratings of GCT for Sentiment, Quality, Growth, and Stability.
What To Do Next?
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MGM shares rose $0.10 (+0.25%) in premarket trading Wednesday. Year-to-date, MGM has declined -11.82%, versus a 18.29% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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