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. Keeping that in mind, here are three growth stocks where the best is yet to come.
Alphabet (GOOGL)
One-Year Revenue Growth: +17.5%
Started by Stanford students Larry Page and Sergey Brin in a Menlo Park garage, Alphabet (NASDAQ:GOOGL) is the parent company of the eponymous Google Search engine, Google Cloud Platform, and YouTube.
Why Is GOOGL a Good Business?
Alphabet’s dominant Google Search sits on the pantheon of the best businesses ever. This is reflected in its robust long-term revenue growth and elite operating margin.
The company’s profit margins have become even higher over time, speaking to its scale advantages and operating efficiency not only in its core Search business but also in Google Cloud Platform and YouTube.
Revenue growth and increasing operating margins are the key ingredients for strong EPS growth. Google has these, and when also factoring in its share repurchases, you can see why EPS has exploded over the long term.
Alphabet is trading at $396.80 per share, or 31.7x forward price-to-earnings. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Boston Scientific (BSX)
One-Year Revenue Growth: +17.4%
Founded in 1979 with a mission to advance less-invasive medicine, Boston Scientific (NYSE:BSX) develops and manufactures medical devices used in minimally invasive procedures across cardiovascular, urological, neurological, and gastrointestinal specialties.
Why Are We Positive On BSX?
Average organic revenue growth of 15.7% over the past two years demonstrates its ability to expand independently without relying on acquisitions
Additional sales over the last five years increased its profitability as the 24.2% annual growth in its earnings per share outpaced its revenue
Free cash flow margin increased by 9.1 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Boston Scientific’s stock price of $56.33 implies a valuation ratio of 16.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Bowhead Specialty (BOW)
One-Year Revenue Growth: +27.7%
Named after the Arctic bowhead whale known for navigating challenging waters, Bowhead Specialty Holdings (NYSE:BOW) is a specialty insurance company that provides customized coverage for complex and high-risk commercial sectors.
