Recently, data from the Bureau of Labor Statistics revealed that prices for United States consumers increased by 3.7% in August. This inflation rate was in line with economists’ and analysts projections. Prices grew at a faster pace compared to the previous month. Specifically, on a month-over-month basis, the inflation rate rose by 0.6%, up from 0.2% in July. When inflation meets or exceeds expectations, it can lead to market uncertainty. All of this is an inevitability as investors become concerned about its potential impact on the stock market. This led to us coming up with this list of 3 cheap stocks to buy.
However, companies have been adapting to inflationary pressures by effectively managing costs and promoting innovation. These three undervalued stocks priced under $50 stand out for purchase into your portfolio for the long term this month. All of these stocks are associated with partnerships that drive innovation and offer long-term growth opportunities in the financial sector.
3 Cheap Stocks to Buy: Confluent Incorporated (CFLT)
Confluent Incorporated (NASDAQ:CFLT) is an end-to-end data-streaming company that allows customers to access, store and monitor data in real-time. Yahoo! Finance reports 25 analysts predicting a one-year price range on CFLT between $30.00 and $45.00, with a mean of $39.00.
The data infrastructure market is expected to reach a valuation of $531 billion by 2030 at a 22% CAGR. The growth rate within this industry comes from innovations in other industries such as cloud services in the Infrastructure as a Service (IaaS) industry.
CFLT boasts strong financials, with $189.20 million in revenue for Q2 2023 growing at a 35.7% 1-year CAGR. The company demonstrates strong signs of profitability with a 65.7% gross profit margin and a $21.6 million FCF that grew 10.8% YoY. Lastly, management can balance the debt and equity of its capital assets effectively through $27.4 million cash from financing growing 274.8% YoY.
CFLT is an undervalued stock that you should purchase because of its strong financials and high growth rate in the data streaming market. It also has partnerships established from its high-demand data-streaming program. This company easily earns its spot on our list of 3 cheap stocks to buy.
Uber Technologies Incorporated (UBER)
Source: NYCStock / Shutterstock.com
Uber Technologies Incorporated (NYSE:UBER) is a ride-hailing conglomerate. The services allows users to remotely reserve a vehicle from services in ride-sharing, public transit, and bike-sharing. The company’s advantage comes from superior flexibility and convenience in comparison to the traditional method of obtaining a taxi.
The mobility services industry is forecasted to grow from $236.42 billion in 2022 to $774.93 billion by 2029 at an 18.5% CAGR. A rising trend of on-demand transportation drove growth for the sector. The ride-hailing segment exercised considerable control throughout the industry as a whole.
Sales growth in 2022 for Uber has grown 82.62% YoY, demonstrating the corporation’s leading position in the industry. Revenue at 9.23 billion increased by 14.33% YoY, net income of 394 million grew by 115.15% YoY, and diluted EPS of $0.18 grew by 113.53% YoY. This beat analyst expectations by 47.40%. Finally, a net profit margin of 4.27% further grew by 113.25%, demonstrating high profitability and financial growth.
Overall, UBER is a strong growth stock with high long-term growth potential as it uses its platform to expand following the partnership with Waymo.
Dutch Bros Incorporated (BROS)
Source: RicoPatagonia / Shutterstock.com
Dutch Bros Incorporated (NYSE:BROS) is a drive-through coffee chain headquartered with company-owned and franchise locations throughout the U.S.
BROS stock is up 2.06% YTD and is currently priced at $27.71. Yahoo! Finance reports nine analysts having a mean 12-month price target of $35.20, with the range spanning from a low of $30.00 to a high of $48.00.
The U.S. Foodservice market was valued at $744.27 billion in 2023 and is expected to grow to $1.37 trillion by 2029 from a 10.67% CAGR. The quick-service restaurants segment remains to have a rising consumption rate of traditional fast food since COVID-19. This will shape out to be a long-term catalyst for the market’s growth.
Dutch Bro’s Q2 earnings were strong and stable. Revenue at $249.88 grew 34.07% YoY, and net income resulting at $2.75 million increased by 403.75% YoY as the company began its shift from growth to value-oriented. Operating income at $2.33 billion grew by 18.54% YoY and all of these metrics indicate long-term profitability and stable growth.
With its rapidly increasing number of locations and demonstrated ability to raise capital, BROS is a buy for growth-oriented investors.
On the date of publication, Michael Que did not have (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.
The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
Michael Que is a financial writer with extensive experience in the technology industry, with his work featured on Seeking Alpha, Benzinga and MSN Money. He is the owner of Que Capital, a research firm that combines fundamental analysis with ESG factors to pick the best sustainable long-term investments.
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