Growth boosts valuation multiples, but it doesn’t always last forever. Companies that cannot maintain it are often penalized with large declines in market value, a lesson ingrained in investors who lost money in tech stocks during 2022.
Deciphering which businesses can sustain their high growth rates is a challenge for even the most seasoned professionals, which is why we started StockStory. On that note, here are three growth stocks where the best is yet to come.
Lam Research (LRCX)
One-Year Revenue Growth: +26.5%
Founded in 1980 by David Lam, the man who pioneered semiconductor etching technology, Lam Research (NASDAQ:LRCX) is one of the leading providers of wafer fabrication equipment used to make semiconductors.
Why Will LRCX Beat the Market?
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Impressive 23.4% annual revenue growth over the last two years indicates it’s winning market share this cycle
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Highly efficient business model is illustrated by its impressive 32.8% operating margin, and its profits increased over the last five years as it scaled
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Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
Lam Research is trading at $299.70 per share, or 39.6x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Bloom Energy (BE)
One-Year Revenue Growth: +56.5%
Working in stealth mode for eight years, Bloom Energy (NYSE:BE) designs, manufactures, and markets solid oxide fuel cell systems for on-site power generation.
Why Is BE a Good Business?
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Annual revenue growth of 37.6% over the last two years was superb and indicates its market share increased during this cycle
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Free cash flow margin is now positive, indicating the company has passed a significant test
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Improving returns on capital suggest its past investments are beginning to deliver value
At $301.30 per share, Bloom Energy trades at 125.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Crescent Energy (CRGY)
One-Year Revenue Growth: +18.3%
Controlling over 1.4 million net acres across proven U.S. basins, Crescent Energy (NYSE:CRGY) extracts oil and natural gas from underground reservoirs in Texas and the Rocky Mountains.
Why Are We Backing CRGY?
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Annual revenue growth of 41.5% over the past five years was outstanding, reflecting market share gains this cycle
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Superiority of its unit economics is reflected in its stellar gross margin of 59%
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Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends