Growth is a hallmark of all great companies, but the laws of gravity eventually take hold. Those who rode the COVID boom and ensuing tech selloff in 2022 will surely remember that the market’s punishment can be swift and severe when trajectories fall.
Deciphering which businesses can sustain their high growth rates is a challenge for even the most seasoned professionals, which is why we started StockStory. That said, here are three growth stocks where the best is yet to come.
Atlassian (TEAM)
1-Year Revenue Growth: +23.2%
Founded by Australian co-CEOs Mike Cannon-Brookes and Scott Farquhar in 2002, Atlassian (NASDAQ:TEAM) provides software as a service that makes it easier for large teams of software developers to manage projects, especially in software development.
Why Will TEAM Beat the Market?
- Billings have averaged 24.9% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
- Strong free cash flow margin of 28.9% enables it to reinvest or return capital consistently
Atlassian’s stock price of $250.66 implies a valuation ratio of 11.5x forward price-to-sales. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Duolingo (DUOL)
1-Year Revenue Growth: +40.8%
Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ:DUOL) is a mobile app helping people learn new languages.
Why Is DUOL a Top Pick?
- Monthly Active Users are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 210% outpaced its revenue gains
- DUOL is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute
At $271 per share, Duolingo trades at 45.1x forward EV-to-EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
Lantheus (LNTH)
1-Year Revenue Growth: +18.3%
Founded in 1956, Lantheus Holdings (NASDAQ:LNTH) develops and commercializes innovative diagnostic and therapeutic radiopharmaceuticals for healthcare providers, with a focus on oncology, cardiology, and neurology.
Why Are We Positive On LNTH?
- Annual revenue growth of 34.6% over the last five years was superb and indicates its market share increased during this cycle
- Free cash flow margin grew by 31 percentage points over the last five years, giving the company more chips to play with
- Returns on capital are growing as management capitalizes on its market opportunities
Lantheus is trading at $100.05 per share, or 14.5x forward price-to-earnings. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
With rates dropping, inflation stabilizing, and the elections in the rearview mirror, all signs point to the start of a new bull run - and we’re laser-focused on finding the best stocks for this upcoming cycle.
Put yourself in the driver’s seat by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.
