Three Affordable Growth Stocks to Invest in by 2025
In the approaching 2025, a multitude of growth stocks are trading at premium valuations, hinting at a possible pause in their accelerated upward trajectory in the nearby future. This could be an opportune moment for long-term investors to reassess their portfolio composition, considering selling off some recently high-performing stocks and incorporating cheaper growth alternatives that might offer better returns both in the current year as well as the long term.
Three such promising, value-rich growth stocks that warrant your attention are AstraZeneca (AZN -1.23%), Uber Technologies (UBER -0.91%), and Zoom Communications (ZM -0.40%). Here are the compelling reasons why you should consider adding these stocks to your investment portfolio in the ensuing period.
1. AstraZeneca
AstraZeneca's reputation as a leading healthcare provider has only grown stronger over the years. The company is now stepping into the world of next-generation therapies, focusing mainly on targeted oncology treatments that are less harmful to healthy cells, as compared to traditional chemotherapy and radiation therapy. In a strategic move, the company recently acquired Fusion Pharmaceuticals, a clinical-stage organization that specializes in radioconjugates, enabling direct delivery of radioactive isotopes to cancer cells through targeted molecules.
With potential revenue of $80 billion by 2030, AstraZeneca's growth trajectory looks promising, given its past four quarters of revenue generation amounting to around $51 billion. The stock experienced a 3% decline in 2024, but with its forward price-to-earnings (P/E) ratio standing at a modest 14, this could be an excellent buying opportunity for investors. The average stock in the Health Care Select Sector SPDR Fund trades at a higher 20 times next year's anticipated profits.
2. Uber Technologies
Uber's shares fell by a minor 2% in 2024, with investors seemingly fretting over Alphabet's Waymo division squeezing Uber's market share. However, market fears regarding autonomous vehicles and their safety under various weather and traffic conditions may be overstated. Companies working on robotaxis are still in the early stages of proving that they can manage all the necessary conditions effectively.
Uber continues to be a prominent and advantageous choice for consumers, and this trend is unlikely to change anytime soon. The company's revenue surged by 17% in the first nine months of 2024, reaching over $32 billion, as OS profit climbed from $458 million to more than $2 billion.
With a forward P/E ratio of 25 and a price-to-earnings-to-growth (PEG) ratio around 0.70, Uber's stock currently presents a compelling price, considering its improving fundamentals and robust growth prospects.
3. Zoom Communications
While Zoom's stock performance may seem to have peaked in response to pandemic-related demand, this perspective overlooks the lasting potential of Zoom's high-quality, user-friendly videoconferencing products. Many organizations continue to prefer Zoom's services, even when they could opt for comparable alternatives like Microsoft Teams at no additional cost.
Zoom's reliable revenue growth from Q3 2024 to Q3 2025 highlights its continuous success. Despite a marginal increase in revenue, Zoom has kept its online monthly average churn rate at a low 2.7%, indicating a high degree of customer satisfaction.
With a forward P/E ratio of 15, Zoom could be an attractive growth stock to invest in and hold for the long term.
By exploring the potentials of AstraZeneca, Uber Technologies, and Zoom Communications, you might find yourself well-positioned to reap the rewards of their growth for years to come.
- Despite a 3% decline in 2024, AstraZeneca's forward P/E ratio of 14 and promising revenue growth make it an attractive buying opportunity for long-term investors looking to diversify their portfolio.
- Despite market fears about autonomous vehicles and safety concerns, Uber's robust revenue growth, improving fundamentals, and a forward P/E ratio of 25 present a compelling investment opportunity.
- With a forward P/E ratio of 15 and a track record of reliable revenue growth, investing in Zoom Communications could be a smart move for long-term investors seeking growth opportunities.
- In light of the overblown concerns about growth stocks' valuations and potential pause in their upward trajectory, adding value-rich growth stocks such as AstraZeneca, Uber Technologies, and Zoom Communications to one's portfolio could yield better returns over the long term.
