The 3 Best Nasdaq Stocks to Buy in May 2024

Stocks to buy

While conventional wisdom calls for selling securities, these best Nasdaq stocks may require a complete rethink. With the possibility that the Federal Reserve might get its soft landing after all, risk-on sentiment has returned on Wall Street.

Previously, the combination of consistently robust jobs reports and soaring energy prices meant that the central bank would likely have been forced to shift its policy. Rather than cutting interest rates, the Fed appeared to be on course to raise them. However, with the April employment picture coming in lower than expected, policymakers may have the flexibility to reduce rates as planned.

If so, now may be the time to be acquisitive. In that case, these are possibly the best Nasdaq stocks to buy.

CyberArk Software (CYBR)

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Based in Israel, CyberArk Software (NASDAQ:CYBR) develops, markets and sells software-based identity security solutions and services in the U.S. and multiple international markets. It offers myriad relevancies, particularly in the area of endpoint access management and multi-factor authentication. Given the extraordinary damages that can stem from unauthorized access, this arena should see increased demand.

Operationally, one of CyberArk’s top attributes is its top-line expansion. Over the past three years, its revenue growth rate came in at 14.5%. That’s above 64.25% of its peers. Further, its free cash flow (FCF) margin stands at 14.04%, ranked better than 82% of the competition.

For the current fiscal year, covering analysts are looking for earnings per share of $2. That’s a big leap from last year’s result of $1.12. Further, sales could land $934.21 million or 24.2% above 2023’s tally of $751.89 million. In the following year, revenue could rise to $1.14 billion, up 22.4% from projected 2024 sales.

With the relevance and forecasted top-line growth, CYBR makes for one of the best Nasdaq stocks to buy.

ACM Research (ACMR)

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Headquartered in Fremont, California, ACM Research (NASDAQ:ACMR) operates under the semiconductor equipment and materials category. Per its public profile, ACM develops, manufactures and distributes single-wafer wet cleaning equipment for enhancing the manufacturing process and yield for integrated chips worldwide. While it’s not the most exciting tech player, it offers critical services that keep the ecosystem running smoothly.

Unsurprisingly, ACM enjoys robust operational metrics. Its three-year revenue growth rate clocks in at 51.7%, above 94.37% of its peers. During the same period, its EBITDA growth rate hit a whopping 80%. Nevertheless, ACMR trades at only 17.15X forward earnings. In contrast, the sector median comes in at 25.06X.

Notably, for fiscal 2024, the high-side EPS target calls for $1.80. Last year, earnings reached $1.63 per share. However, the spotlight may be on the top line, with sales projected to hit $699.36 million on average. That’s up 25.4% from last year’s print of $557.72 million. Also, the blue-sky sales target calls for $731.35 million.

With ongoing relevancy forecasted, ACMR ranks among the best Nasdaq stocks to buy.

Rhythm Pharmaceuticals (RYTM)

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Hailing from Boston, Massachusetts, Rhythm Pharmaceuticals (NASDAQ:RYTM) is a commercial-stage biopharmaceutical company focusing on rare neuroendocrine diseases. It features multiple therapeutics in various stages of clinical trials focused on complex obesity-related conditions. Since the start of the year, shares lost about 3% of equity value. However, the bulls have been driving shares higher in recent sessions.

Operationally, it’s not the most remarkable enterprise. For example, its three-year EBITDA growth rate comes in at 1.1%. That’s a bit off from the sector median value of 6%. However, it does command a strong balance sheet, with a cash-to-debt ratio of nearly 219X. In contrast, the sector median is only 6.54X.

For fiscal 2024, analysts are looking for revenue to reach $131.61 million. If so, that would represent a gargantuan gain of 70% from last year’s result of $77.43 million. Further, the blue-sky sales target is $137.78 million.

By the following year, consensus sales targets $206.2 million, with a high-side estimate of $298.46 million. While RYTM is speculative, if the stars align, it could be one of the best Nasdaq stocks to buy.

On the date of publication, Josh Enomoto 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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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