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Growth and momentum stocks can offer incredible opportunities, but finding the right ones at the right price can be a challenge. Many high-flying names come with stretched valuations, making them vulnerable to sharp pullbacks. However, some stocks stand out by delivering strong earnings and sales growth, with sturdy price momentum, but still trade at reasonable valuations—offering a more attractive risk-reward profile.
In this article, we highlight three such stocks—Palomar Holdings (PLMR),Expedia Group (EXPE),and Gambling.com Group (GAMB), all of which boast strong fundamentals, top Zacks Ranks, and sustained upside trends. With bullish outlooks and manageable downside risks, these stocks are well-positioned to outperform in the year ahead.
Image Source: Zacks Investment Research
Gambling.com: High-Growth Stock with Fair Valuation
Gambling.com is a leading performance marketing company specializing in the online gambling industry. The company provides digital marketing services that connect online gaming operators with new players through its portfolio of websites and proprietary technology. As the online betting market continues to expand—driven by increasing legalization across the US and Europe—Gambling.com stands to benefit from rising demand for its services.
Currently holding a Zacks Rank #2 (Buy), GAMB is projected to deliver impressive revenue growth of 16.4% this year and an even stronger 36.5% next year. On the bottom line, earnings are expected to surge 74% this year, followed by a solid 15% increase next year, highlighting its profitability and scalability. Despite its high-growth trajectory, the stock remains attractively valued, trading at just 15.8x forward earnings, a reasonable multiple given its rapid expansion and strong fundamentals.
With continued momentum in the online gambling industry and robust financial performance, Gambling.com is well-positioned for further upside in 2025.
Image Source: Zacks Investment Research
Palomar Holdings: Boring Stock with Strong Returns
In a market dominated by AI-driven hype and speculative growth stocks, Palomar Holdingsoffers a fresh alternative—a steadily growing, profitable business in the often-overlooked insurance sector. While insurance may not be the flashiest industry, it boasts a simple and powerful business model, with predictable cash flows and essential products that remain in demand regardless of economic cycles.
Palomar stands out with a Zacks Rank #1 (Strong Buy) rating and extremely robust fundamentals. The company is projected to grow sales by 33.6% this year and another 22.1% next year, while earnings are expected to rise 25% and 18.3%, respectively. Further strengthening its investment case, PLMR trades at just 22.9x forward earnings, well below the industry average, despite its superior growth.