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As we enter 2025, many growth stocks are trading at high valuations and could be running out of room to rise in the near term. For long-term investors, now may be a good time to reevaluate the contents of your portfolio to see if it's worth potentially selling off some of your recent high performers and swapping in some cheaper growth stocks instead. By doing so, you could set yourself up for some better gains for not just this year but the long term as well.
Three growth stocks that look particularly cheap right now are AstraZeneca (NASDAQ: AZN), Uber Technologies (NYSE: UBER), and Zoom Communications (NASDAQ: ZM). Here's why you should consider adding them to your portfolio today.
1. AstraZeneca
AstraZeneca is a leading healthcare company that over the years has gotten bigger and better. Today, it's investing in next-generation therapies such as oncology treatments that are more targeted than chemotherapy or radiation, both of which damage healthy cells even as they kill cancerous ones.
Last year, AstraZeneca purchased Fusion Pharmaceuticals, a clinical-stage company that developed radioconjugates, which (as the company explains) "deliver a radioactive isotope directly to cancer cells through precise targeting using molecules such as antibodies, peptides or small molecules."
Between acquisitions and its internal research and development pipeline, AstraZeneca believes that by 2030, its revenue could hit $80 billion. That would be impressive growth for a company that has generated around $51 billion over its past four quarters.
AstraZeneca's stock fell by 3% last year and with its forward price-to-earnings (P/E) multiple at just 14, it could be a steal of a deal for investors right now. The average stock in the Health Care Select Sector SPDR Fund trades at nearly 20 times next year's expected profits.
If AstraZeneca remains a growth beast and hits its ambitious targets, this may prove to be one of the best healthcare stocks to own over the next five-plus years.
2. Uber Technologies
Ride-hailing company Uber's shares fell by 2% last year; investors appear to have overreacted to concerns that Alphabet's Waymo subsidiary will chip away at its market share in the near future. But with robotaxi companies still having a long way to go to prove that autonomous vehicles are safe enough to operate under a myriad of weather and traffic conditions, I believe the market's perception of the risks Uber faces is overblown right now.
Uber is still a dominant and practical option for consumers, and that isn't likely to change anytime soon. The company has generated fantastic growth over the years and its profits have also been surging. Through the first nine months of 2024, its revenue rose by 17% to more than $32 billion and its operating profit jumped year over year from $458 million to just over $2 billion.