Just Eat plc isn't the only stock with a promising future

Online takeaway ordering service Just Eat(LSE: JE) has enjoyed a highly prosperous year. The company's stock price has gained 40% in 2017, with its sales and profit growth forecasts being hugely enticing.

However it is not the only company which could post high levels of capital growth over the medium term. Certainly, the FTSE 100 may be relatively high at the present time, but this stock could offer high growth at a reasonable price. As such, it could be worth buying today ahead of potentially FTSE 100-beating performance.

Upbeat performance

The company in question is Information Management Software provider Ideagen(LSE: IDEA). It reported an upbeat trading update for the first six months of its financial year on Tuesday. The company's performance was strong during the period, and it remains on target to deliver revenue and adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) which are significantly ahead of the same period from the prior year.

In fact, the business is expected to post an underlying organic revenue growth rate of around 12% for the period. It is also on track to meet expectations for the full year to 30 April 2018. Encouragingly, cash generation in the first half of the year was strong, with the company's balance sheet having a £5.9m cash position as well as no debt. This reduces its overall risk and provides it with an improved risk/reward ratio for the long run.

Looking ahead

Ideagen is forecast to post a rise in its bottom line of 26% in the current year, followed by further growth of 10% next year. Despite such an impressive growth outlook, the company's shares trade on a price-to-earnings growth (PEG) ratio of just 0.8. This suggests that they offer a wide margin of safety and that more upside potential is on offer after their 31% gain since the start of the year.

Likewise, Just Eat also appears to have significant share price growth potential. The company also has a PEG ratio of 0.8. Certainly, there is a risk of a downturn in UK consumer spending hurting the company's financial performance. With inflation moving higher and spending levels coming under pressure, people may cut back on non-essential items. However, since takeaways could also be viewed as an affordable substitute item for dining out due to their lower cost, the company's performance may hold up better than expected.

Investment potential

Just Eat has international exposure gained partly through its acquisition programme. For example, SkipTheDishes has gained exposure to Canada, and seems to be performing well according to the company's recent update. With the company appearing to have a sound balance sheet, it could pursue more acquisitions in future.

Therefore, now could be the right time to buy it alongside Ideagen. Both companies seem to have sound business models which offer high growth, while investor sentiment does not yet appear to have peaked even after substantial share price gains during the course of 2017.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has recommended Just Eat. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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