After a volatile month of August for the equities market, there's no shortage of opportunities to buy quality stocks at a discount to their recent highs. But even if you're looking to buy into strength, there are still plenty of standout stocks you can buy on the cheap - all you need to do is take a look in the under-$10 area of the market.
Here's a look at three outperforming stocks you can buy right now for under $10 a share - and based on analysts' consensus estimates, all of these standout names have plenty of upside remaining from current levels.
GoodRx Holdings
Founded in 2011 by Trevor Bezdek and former Facebook executives Doug Hirsch and Scott Marlette, GoodRx (GDRX) is an online healthcare company that operates a telemedicine platform, along with a free-to-use website and mobile app that track U.S. prescription drug prices. GoodRx provides drug coupons for discounts on medications, with more than 75,000 pharmacies registered on its platform.
Shares of the company - which currently commands a market cap of $2.52 billion - have jumped 37% so far this year, but still trade below $7 per share. By comparison, the S&P 500 Index ($SPX) has gained about 16% in 2023.
GoodRx posted a mixed set of numbers for the second quarter in early August. Revenues came in at $189.7 million, down 1.1% from the prior year - primarily due to a fall in subscription revenue and pharma manufacturer solutions revenue. However, adjusted EPS improved to $0.07 from $0.06 in the year-ago period, and topped the consensus estimate of $0.06 per share. The company's earnings have surpassed Street expectations in each of the past five quarters.
Additionally, GoodRx reported growth in monthly active users to 6.1 million from 5.8 million in the previous year.
The company is also eyeing strategic initiatives to bolster its core focus of offering affordable healthcare. For instance, the company recently partnered with CVS Caremark, a CVS (CVS) company, to launch Caremark Cost Saver - which will lower out-of-pocket pharmacy drug costs for CVS Caremark clients.
Overall, analysts remain cautiously optimistic about GoodRx stock. The consensus rating is a “Moderate Buy” with a mean target price of $8.44, indicating upside potential of about 31% from current levels. Out of 18 analysts covering the stock, 7 have a “Strong Buy” rating and 11 have a “Hold” rating.
Travelzoo
Next up on our list is the online travel deal company Travelzoo (TZOO). Founded in 1998, the New York-based company publishes daily deals on hotels, flights, cruises, vacation packages, and other travel experiences. The company has 30.8 million users registered on its platform, and has 25 offices worldwide.
Travelzoo currently has a market cap of $108.69 million, and its shares have rallied more than 51% on a YTD basis to hover around $6.63 as of this writing.
Travelzoo reported a mixed set of numbers for the second quarter, though both revenue and earnings rose when compared to the previous year. Revenues for the quarter came in at $21.1 million, up 19.4% from the prior year, and powered by growth in all of its key revenue segments.
However, while, EPS more than doubled to $0.17 per share from the previous year, it failed to top the consensus estimate of $0.20. Notably, the company's EPS has failed to surpass the Street estimates in three out of the past five quarters.
That said, Travelzoo has a loyal user base with 7.5 million mobile app users, and 4.1 million social media followers. Further, the company is also delving into the metaverse space with “Travelzoo Meta,” a virtual reality travel website that is accepting 1 million founding members for a one-time fee of $20. Although it is still at the nascent stage, the foray into the metaverse could be a future avenue of growth for the company, especially considering its large existing user base.
Overall, Travelzoo stock is not that widely covered by analysts, with only three tracking the shares. However, they remain bullish on the stock, handing out a “Strong Buy” rating with a mean target price of $11.50 - indicating expected upside potential of roughly 73% from current levels. Two analysts have a “Strong Buy” rating, with one “Moderate Buy” rating on the stock.
Crescent Point Energy
We round out our list with a Canadian oil and gas company called Crescent Point Energy (CPG). Founded in 2001, the company is one of the largest independent oil and gas producers in Canada, and has a U.S. presence, too. The company currently has an approximate market cap of $4.54 billion.
CPG is up 21.5% in 2023 so far - outperforming not only the rest of the energy sector, but the broader S&P 500, as well. And, like many of its oil and gas peers, Crescent Point offers a healthy dividend yield (currently 4.04%). The shares are trading just above $8 in today's session.
In the April-June period, the company’s average daily production was 155,031 boe/d, up 20% from the prior year. However, Crescent's adjusted EPS fell to CAD $0.38 from CAD $0.47 in the prior year. This can be attributed to the decline in average selling prices to CAD $67.31/boe from CAD $109.44/boe in the previous year.
Crescent has more than doubled its net debt levels, mainly due to the CAD $1.7B strategic acquisition of oil and liquids-rich Montney assets carried out earlier this year. However, the company has been taking steps to deleverage its balance sheet, most notably with the CAD $675 million sale of its North Dakota assets in August.
Analysts are bullish about the prospects for Crescent. They maintain a consensus “Strong Buy” rating on the stock with a mean target price of $10.74, indicating upside potential of about 28% from current levels. Out of 11 analysts covering the stock, 8 have a “Strong Buy” rating and 3 have a “Moderate Buy” rating.
