7 hidden growth stocks ready to take off

For investors looking to give their portfolio a boost, so-called hidden gem growth stocks may have a lot to offer. By this I’m talking about companies that are not really favored by Wall Street. Still, if the stars align perfectly, they could swing decidedly higher.

There is a key advantage when talking about hidden growth values: no one talks about them. Of course, I’m being facetious. But the takeaway is that compared to the usual suspects on the street, some businesses lag behind. The fact is that if they exceeded expectations, they could generate significant returns for shareholders.

And here’s the other point. Because these ideas, by their nature, are less discussed entities, expectations are low and therefore rewards can be high. Certainly, you must accept a higher level of risk; it goes with the territory. If you can accept it, these are the hidden growth values ​​to consider.

Western Oil (OXY)

As one of Warren Buffett’s portfolio holdings, Western oil (NYSE:OXY) might not immediately seem like a compelling idea for hidden growth stocks. However, the energy giant – which focuses on (upstream) oil and gas exploration and production operations – is worth putting on your radar. Naturally, there is a fundamental relevance to consider.

With Russia’s invasion of Ukraine, the post-World War II international order was upended. Few people could have imagined until then that a land war would break out in Europe. Geopolitically, the action highlighted hydrocarbons and their supply. Despite initiatives to focus on renewable energy, the world still runs on oil. So we might as well get this oil with our own hands.

This is where the argument about hidden growth values ​​comes in. For fiscal 2024, analysts don’t see much expansion, either in terms of revenue or bottom line. However, in fiscal 2025, sales could reach $32.4 billion, up 10.9%. Additionally, earnings per share could reach $4.68, a significant jump from 2023’s earnings of $3.69.

Oshkosh (OSK)

Based in Oshkosh, Wisconsin, Oshkosh (NYSE:OSK) falls within the agricultural machinery and heavy construction machinery sector. According to its public profile, the company primarily provides purpose-built vehicles and equipment. One of its main business units focuses on military/security applications. From a cynical point of view, one could say that OSK could be one of the most hidden growth stocks. Faced with raging geopolitical tensions, the demand for military solutions could increase.

But financially, Oshkosh is much more than just a platform for opportunism. Between the second quarter of 2023 and the first quarter of 2024, the company posted an average EPS of almost $2.80. This resulted in a surprise profit of 36.73%, which is quite impressive. During the last 12 months (TTM), net income was $688.9 million or EPS of $10.45. Sales reached $9.93 billion.

For fiscal 2024, Wall Street experts are targeting EPS of $11.27. If so, that would imply an expansion of almost 13% from last year. In total, sales could reach $10.63 billion, up 10% from $9.66 billion in 2023. This makes a strong argument for hidden growth stocks.

Qualys (QLYS)

Headquartered in Foster City, California, Qualys (NASDAQ:QLYS) falls under the infrastructure software sector. According to its company profile, Qualys and its subsidiaries provide a cloud-based platform that delivers information technology (HE), security and compliance solutions. One of its main offerings includes something called cybersecurity asset management. By providing robust countermeasures against cyberattacks, Qualys ranks among the most vital hidden growth stocks.

When it comes to cybersecurity, the usual suspects arise. However, QLYS deserves some respect. Over the past four quarters since the first quarter of 2024, the company’s average EPS has reached almost $1.41. This result translated into an average earnings surprise of almost 21%. Once again, this is an impressive performance.

During the TTM period, Qualys reported net income of $162.22 million or EPS of $4.31. Revenues reached $569.58 million. For fiscal 2024, analysts offered a moderate EPS forecast of $5.26, down a penny from last year. However, revenue could reach $605.25 million, up 9.2% from 2023’s $554.46 million.

Guess? (GES)

Certainly, I was hesitant to put a clothing manufacturer Guess? (NYSE:GHG) on this list of hidden growth stocks. With the demographic shift to Millennials and later Generation Z, fashion trends have changed dramatically. Young people simply don’t care about labels as much as older cohorts. Additionally, a tough economy puts young consumers in a difficult situation.

So there doesn’t seem to be much growth here. Indeed, the consensus opinion of analysts on GES stock remains a safe bet. But here’s the thing I noticed. The Street experts are also targeting a price per share of $29.25. This represents an upside potential of more than 26%. Additionally, the most optimistic target is $37. What?

During the TTM period, Guess reported net income of $220.66 million or EPS of $3.54. Revenue during the period reached $2.8 billion. For the current financial year (2025), analysts expect sales of $3.1 billion. If so, this would translate into a revenue expansion of 11.5%. It’s risky, but might be something to think about since so few are.

Lyft (LYFT)

For the most part, I have always preferred (as an investment) the main rival to Lyft (NASDAQ:LYFT). You know what company I’m talking about. However, LYFT deserves recognition given its ambitious growth projections. According to a Benzinga report, management projects that between 2024 and 2027, gross bookings will increase by a compound annual growth rate (CAGR) of 15%.

Previously, it seemed like Lyft was simply too conservative compared to its main competitor. You had to step on the accelerator or risk becoming irrelevant. It now appears that management has gotten the message and is about to move full steam ahead. Additionally, if gross bookings were to increase by double-digit percentage points, it would suggest a robust consumer economy.

During the TTM period, Lyft incurred a net loss of $184.21 million. However, revenue reached $4.68 billion. And the current quarterly year-over-year growth rate stands at 27.6%. For fiscal 2024, it projects only a modest “penalty,” with sales reaching $5.51 billion, up 25.2% from last year.

Affirm (AFRM)

Based in San Francisco, California, Affirm (NASDAQ:AFRM) operates in the field of infrastructure software. According to its public profile, Affirm operates a digital and mobile commerce platform in the United States, Canada and other international markets. The company specializes in buy now, pay later (BNPL). It was all the rage, especially during the holiday season last year.

As The Wall Street Journal pointed out, BNPL platforms allow people to continue spending without credit agencies finding out. We can now address the moral hazards of such a paradigm. However, as an emotionally agnostic investor, AFRM stock could be an intriguing idea. Yes, it is very risky due to the dependence on the consumer economy. At the same time, people love Affirm’s BNPL offering.

During the TTM period, Affirm recorded a net loss of $678.58 million. However, during this period, revenue reached $2.11 billion. On a quarter-on-year basis, the company records a sales growth rate of 51.2%. It’s not going to last, but here it is: analysts are forecasting revenue of $2.26 billion for fiscal year 2024. That corresponds to growth of 42.6%.

Aurora Innovation (AUR)

Based in Pittsburgh, Pennsylvania, Aurore Innovation (NASDAQ:AUR) operates in the field of IT services. According to its company profile, Aurora specializes in autonomous driving technologies. It primarily focuses on its platform called Aurora Driver, which provides a suite of autonomous hardware, software and data services. The objective here is to promote the adaptability and interoperability of vehicles.

While full autonomy has always been a challenge, that won’t stop companies from throwing their hat into the ring. We all know about the big companies that have invested billions in autonomous driving systems. What makes AUR stock so attractive is that it is risky. With a market cap of less than $4 billion and a price of $2.28 per share, this thing could fly.

Now, for fiscal 2024, analysts on average are forecasting sales of just $830,000. It’s possible the company could reach $3 million. However, the big day could come in fiscal year 2025. That’s when sales could skyrocket to $17.61 million. It’s a risk, but if you’re looking for hidden growth stocks, it could be.

As of publication, Josh Enomoto did not hold (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publishing Guidelines.

Formerly a senior business analyst at Sony Electronics, Josh Enomoto helped negotiate major contracts with Fortune Global 500 companies. Over the past several years, he has provided unique and critical insights into investment markets, as well as various other sectors, including law, construction management and healthcare. Tweet it to @EnomotoMedia.