2 magnificent stocks that scream buying in August

The stock market has taken investors on a wild ride in recent years. While the healthy bullish period enjoyed by the major indices has propelled the shares of many top companies higher, volatility in the markets continues.

The latter months of summer have historically been a period of slower growth, but investors have recently faced renewed turbulence as concerns about inflation persist. While there may be additional ups and downs, investors who maintain a long-term horizon can still find plenty of compelling opportunities to put cash to work.

If you have cash to invest in August and are looking for top stocks to buy, here are two companies that look like screaming buys right now.

1. His and her health

His and her health (HE -0.83%) offers subscription-based healthcare services across a spectrum of needs, including sexual health, weight loss, mental health and dermatology. By paying a recurring monthly subscription, users can get the prescriptions they need delivered straight to their door without hassle. The platform also facilitates virtual care visits between patients and healthcare providers, removing barriers to receiving quality, cost-effective care.

This business model has been incredibly effective and profitable for Hims & Hers Health. The company has come a long way since its beginnings, when it initially focused only on men’s wellness solutions such as hair loss products and treatments for sexual problems such as erectile dysfunction. The company reported 1.9 million subscribers at the end of the second quarter of 2024, an incredible 43% year-over-year growth. Hims & Hers also brought in $315.6 million in the three-month period, up a staggering 52% from a year ago.

The company is currently profitable under generally accepted accounting principles (GAAP). Its net income of $13.3 million in Q2 2024 was a significant improvement over its net loss of $7.2 million in the same quarter in 2023. Hims & Hers also posted free cash flow of 47 .6 million in the quarter, more than four times higher. than the figure reported in the period a year ago.

Looking ahead, management expects each of its core specialties — sexual health, mental health, men’s and women’s dermatology and weight loss — to reach $100 million in revenue by 2025. In the last quarter, more than 785,000 of subscribers are using a personalized healthcare solution from the platform, an incredible 164% increase from just a year ago.

Hims & Hers Health recently announced that it will offer customers access to GLP-1 injections. While the average cost of these injections is $1,000 per month, users who opt for a prescription through the virtual healthcare platform and have an annual subscription could access the injections for just $79 per month.

The company’s growth trajectory is in its relatively early stages, and the financials reflect the above-average growth that often comes with a relatively new company. While this growth is likely to moderate at some point, Hims & Hers Health enjoys an ever-expanding footprint in a vast total addressable market and is steadily building a track record of robust cash generation and profits . Long-term investors may find that all of these are reasons to get some shares.

2. Duolingo

Duolingo (DOUBLE 0.41%) is known for its language learning platform and app that allows users to advance their language skills anytime, anywhere. The company has a freemium model, which allows users to learn foreign languages ​​with various free tools, but they can also earn greater benefits and learning solutions by paying a recurring subscription.

The dynamic between its free content and paid subscription-based solutions has been incredibly effective in attracting and retaining customers. Duolingo hit a huge milestone for the company in Q2 2024, registering over 100 million monthly active users with a total of 8 million subscribers on the platform.

That monthly active user figure was up 40% year over year, while the paid subscriber figure was up 52% ​​from the same quarter a year ago. In addition, more than 20% of Duolingo’s daily active users now have a platform usage streak of over a year. Daily active users totaled 34.1 million people at the latest count, up 59% from a year ago.

Looking at total bookings for Q2 2024, this measure increased 38% year-over-year to $190.1 million. Subscription bookings in the three-month period totaled $156.5 million, up 47% year-over-year.

In terms of the company’s results, revenue rose 41% in Q2 2024 to $178.3 million, while net income increased nearly six times year-over-year to $24.4 million. dollars. Potential investors will also be happy to know that the company is cash flow positive, with free cash flow up about 60% year-over-year in Q2 to $54.9 million.

Duolingo still has a lot of room to run. Management said that paid subscriber penetration of monthly active users is less than 9% right now. Given its continued impressive growth in paid subscribers and active users, Duolingo appears well-positioned to take advantage of new and existing sources of financial growth in the coming years. This is a ride that long-term investors may want to come on.