3 Long-Term Stocks to Buy on the Dip: May 2024
The U.S. economy is showing remarkable resilience despite previous concerns of a slowdown. Recent data, including the S&P Global composite PMI, revealed encouraging signs of growth, surpassing expectations and hitting a 25-month high in May. Chief economist Chris Williamson highlighted the acceleration of the U.S. economic upturn, suggesting a solid GDP gain for the second quarter. However, lingering challenges exist, such as rising input prices and signaling potential inflationary pressures, which the Fed closely monitors as it navigates its fight against inflation. This news indicates that the economy is not performing at the highest level, meaning that some companies on the stock market are temporarily down. This creates an opportunity to invest in some long-term stocks to buy on the dip.
These stock options are guaranteed to deliver significant returns.
Okta (OKTA)
Okta (NASDAQ:OKTA) is an American cybersecurity company that offers identity and access management solutions for businesses and individuals. Currently trading at $97.16, OKTA has increased 10.28% in the past year but is still down 66.7% from its all-time high.
The global Identity and Access Management (IAM) market in which Okta operates is expected to experience substantial growth in the next few years. Valued at $12.56 billion in 2022, the market is forecasted to reach $27.88 billion by 2028, exhibiting a CAGR of 14.21%. As demand for IAM solutions increases, Okta’s strong position will allow it to capitalize on the industry’s growth.
Okta reported impressive financial results in Q4 2024, experiencing top- and bottom-line growth. The company saw total revenue jump 19% YOY to $605 million while net income reached $113 million, up 117% YOY. There was also a notable improvement in the company’s cash position, which was reported at $2.202 billion on January 31, 2024. Furthermore, Okta logged a record operating cash flow of $174 million and free cash flow of $166 million, making up 29% and 28% of total revenue, respectively.
Okta’s promise lies not only in its financial strength but also in its active pursuit of strategies to expand market share. Recently, the company acquired Spera to broaden its threat detection and security posture management capabilities. This move will strengthen Okta’s market position as one of the promising long-term stocks to buy on the dip.
SoFi Technologies (SOFI)
SoFi Technologies (NASDAQ:SOFI) is an online bank and personal finance company. The stock has underperformed this year, falling 28.29% YTD. However, analysts remain bullish, offering a 12-month median price target of $9.00. This represents a 28.21% increase.
The global consumer finance market is projected to reach $1.65 trillion by 2030, exhibiting a CAGR of 7.21%. This growth is mainly due to shifting consumer preferences. Consumers increasing usage of digital platforms for financial transactions, will boost SOFI’s growth opportunities.
Despite recent declines in the company’s stock, SOFI boasts excellent financials. In Q1 2024, revenue jumped 37% yearly to $645 million. Furthermore, net income reached $88 million, while EBITDA increased 91% yearly to $144 million. These metrics surpassed expectations, with EPS beating analyst estimates by 196%.
The most significant catalyst behind SOFI’s success is its diversified revenue stream. SoFi’s lending, financial services and tech platform segments are crucial for SOFI to achieve profitability during economic downturns. In Q1 2024, the financial services and tech platform segments increased their net revenues by 86% and 21%, respectively. SOFI enhanced its profitability and resilience to macro challenges by developing these segments.
With robust growth and strong fundamentals, SOFI shows promise while trading at a significant discount from its all-time high.
Delta Air Lines (DAL)
Delta Air Lines (NYSE:DAL) was the named number one operating airline in the annual Business Travel News Airline Survey for the 13th year in a row. The survey cited Delta’s extraordinary customer service, distribution channels, expansive network and quality of communications as the best in the business. DAL’s current price is down from its 52-week high.
The Global Airlines Market is valued at $553.9 billion in 2022. It is projected to reach a value of $735 billion by 2030 at a CAGR of 3.6%.
DAL experienced strong growth during Q1 2024. DAL reported $13.75 billion in revenue, marking a YOY increase of 7.75%. Net income and diluted EPS, $37 million and $0.06, respectively, increased over 110% YOY. Overall, Q1 2024 was successful for DAL, beating expectations on both EPS and revenue.
Delta’s earning forecast for the second quarter exceeds analysts’ expectations, earning it multiple “strong buy” ratings. This is mainly due to the airline industry benefiting from a surge in global travel demand for leisure and business. Although Delta’s stock price is still below pre-pandemic levels, it’s still one of the top long-term stocks to buy on the dip.
On the date of publication, Michael Que did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
