2 growth stocks to buy for less than $100

Stocks with solid growth prospects don’t always trade for exorbitant prices. Whether they’ve recently gone through a stock split, their stock has fallen unduly, or the market isn’t seeing its potential, there are many reasons why otherwise attractive companies would trade for less than $100 despite being in the market for a period. Companies in this category can allow people to invest on a budget, at least for those who prefer not to buy fractional shares.

With that background, let’s consider two growth stocks trading for less than $100 that look like great options right now: Shopify (STORE 0.64%) and Exelixis (EXEL 0.31%).

1. Shopify

Shopify wants to be a 100-year-old company. It is not yet known whether he can achieve this goal. However, Shopify’s prospects look promising for the near future. The e-commerce industry in which it operates has a vast growth track. In the second quarter, e-commerce sales accounted for just 16% of US retail sales. That number probably hasn’t peaked yet. Analysts predict that the industry will grow at a good level in the coming years.

The Shopify platform, which allows businesses to build online storefronts, is one of the leaders in this e-commerce niche. Shopify also has an app store with hundreds of options that allow merchants to customize their websites based on their needs and those of their customers. It’s hard to leave the company’s ecosystem once companies have spent the time and effort to create custom storefronts that are already attracting customers, which ensures Shopify business high switching costs. So Shopify has a competitive edge and a lot of white space in the industry.

But there are arguments against investing in the company. One of them is profitability. Shopify hasn’t really delivered green on the bottom line, at least not consistently. But it should make progress in this regard, especially since it has abandoned its expensive and low-margin logistics business. Shopify’s margins have moved in the right direction since then. In the second quarter, the company’s revenue rose 21% year over year to $2 billion. Its gross margin was 51.1%, better than the 49.3% reported in the year-ago period.

Shopify’s free cash flow of $333 million was up 243%, while its free cash margin of 16% was much better than the 6% reported in the year-ago quarter. It also posted net earnings per share (EPS) of $0.13, compared to last year’s loss per share of $1.02. Shopify is closer than ever to consistent profits.

And while the stock looks expensive — its presale price is 11.9, when the undervalued range starts at 2 and below — given its long-term outlook and excellent position in its industry, it’s worth the premium , in my opinion. view.

Shopify might not be for everyone, but it seems like a great option for growth-oriented investors looking to hold the stock for five years or more. Shopify shares are currently worth just under $81 each.

2. Exelixis

Exelixis is a mid-cap biotech that has carved a niche for itself in the competitive oncology market. The secret to the company’s success is Cabometyx, a cancer drug that continues to impress. Cabometyx is the most prescribed therapy of its kind in renal cell carcinoma (kidney cancer). It is also approved for several other types of cancer, including liver.

Cabometyx sales continue to grow. In the second quarter, Exelixis’ total revenue rose 35.6% year-over-year to $637.2 million. If you consider just sales of its crown jewel, Exelixis reported US sales of cabozantinib (the generic name for Cabometyx) of $437.6 million, up nearly 7% year over year.

Its EPS of $77 was up significantly compared to the $0.25 reported in the year-ago period. Exelixis is seeking multiple label extensions for Cabometyx. A US regulatory decision is awaited for the drug in the treatment of advanced neuroendocrine tumors. Exelixis also plans to submit an application to regulatory authorities for Cabometyx in the treatment of castration-resistant prostate cancer in combination with Rocheof Tecentriq.

This is in addition to other clinical studies in which Cabometyx is being evaluated. Exelixis should continue to increase indications for its crown jewel. The company is also looking to develop other cancer drugs that will hopefully be nearly as successful.

The company is conducting phase 3 studies for a new product, zanzalintinib, including in the treatment of colorectal cancer – the second leading cause of cancer death in the world. This even if colorectal cancer is still very treatable in its early stages. There is an unmet need for drugs that can treat this type of cancer once it has metastasized. That’s what Exelixis is after.

Exelixis also has several early-stage programs. Most mid-cap biotechs don’t generate revenue and earnings growth consistently, nor do they have a pipeline like Exelixis’. In fact, some of the biotech’s peers of similar size have no products to market and are consistently unprofitable. Exelixis’ innovative abilities in one of the largest therapeutic areas and consistent financial results make it a stock worth holding on to for a while.

And its shares are only $27 a piece right now.