Hypergrowth stocks are among the most intriguing to watch right now. Retail investors and speculators of all kinds have flocked to various companies touting sky-high growth rates recently for exposure to booming valuations across the board.
With interest rates still near historic lows (yes, they’re coming up, ever so slightly), investors have benefited from a so-called “Goldilocks period.” With valuations allowed to expand, investors looking for short-term wins with various hypergrowth stocks have been rewarded. Indeed, the recent volatility in the stock market has been incredible to watch.
Of course, what goes up must come down. And many investors know to be careful when we see hyper-growth stocks take off in such a short amount of time. Accordingly, it’s perhaps unsurprising to see many such stocks sold off in recent months, following a rather incredible run through the end of last year into January and February of this year.
However, these seven top hyper-growth stocks are certainly positioned well to ride any waves that may come. Let’s take a look at seven top growth stocks for investors looking to swing for the fences:
- Li Auto (NASDAQ:LI)
- Asana (NYSE:ASAN)
- Upstart (NYSE:UPST)
- DraftKings (NASDAQ:DKNG)
- Riot Blockchain (NASDAQ:RIOT)
- First Solar (NASDAQ:FSLR)
- Booking Holdings (NASDAQ:BKNG)
Will we see another boom in hypergrowth stocks before the end of the year? Time will tell.
Top Hypergrowth Stocks to Buy: Li Auto (LI)
Electrification is a trend that’s hard to stop. Indeed, with global attention shifting towards the need for increasing electrification due to rising concerns of climate change, the electric vehicle market is poised for significant growth. Naturally, EV stocks have proven to be among the hypergrowth plays that can provide long-term growth that many investors look for.
Li focuses on the growing electric SUV market. The company’s recently-introduced model, the Li ONE, has made significant headway in this regard. Viewed as a competitor to Tesla’s Model Y, Li Auto is among the EV growth stocks that’s on the radar of true EV fanatics.
Of course, Li is much less well-known than its peers. Accordingly, this is a stock that is priced relatively decently. I say relatively because valuations continue to be incredibly high in this sector.
That said, Li’s growth trajectory suggests a stock that could grow into its valuation. As per the company’s second quarter earnings report, Li Auto sold 17,575 vehicles as opposed to only 6,604 during the same period last year.
Accordingly, this is a top EV hypergrowth stock on my radar right now.
Another less well-known stock, Asana is a company worth looking at.
This is a SaaS (Software as a Service) company that has performed quite well since its public listing last year. Indeed, ASAN stock has been a near-4-bagger for early investors over the past year. That’s certainly hypergrowth stock appreciation in my book.
Whether this kind of growth will continue remains to be seen. However, the company continues to deliver blowout results, showing there’s still room for the stock to run.
During the company’s most recent quarterly results, Asana posted sky-high revenue growth of 72% on a year-over-year basis. Bringing in nearly $90 million in sales during this quarter on a run rate basis, ASAN stock is definitely expensive at more than 50-times sales (based on a valuation of $19.4 billion at the time of writing). However, should this company keep this growth rate up, it’s possible to look favorably upon this stock on a forward-looking basis.
Asana saw its customer growth balloon in triple-digit fashion this past quarter, especially among its big spender group (those spending $50K or more). Furthermore, forward-looking estimates have been revised upward, leading hypergrowth investors to remain bullish on this company’s current valuation.
Upstart is another company with a sky-high growth rate (and a sky-high valuation). Upstart’s revenue soared more than 1,000% this past quarter, on a year-over-year basis. That’s right — quadruple-digit growth. That’s hard to find in this market, or anywhere else.
Indeed, Upstart’s rather low starting base may have skewed these numbers somewhat. However, investors can’t deny the trajectory Upstart is on. As a key provider of AI and cloud-based technology aimed at disrupting the credit scoring and lending markets, Upstart’s runway for growth appears massive.
This company has seen various partnership deals continue to flow, along with rising consumer lending. As a company that makes it easier for those with poor credit scores to get loans, there’s huge demand for Upstart’s product.
The company also posted rather impressive profitability, bringing in adjusted net income of $58.5 million this past quarter, compared to an adjusted net loss of $3.7 million the same time last year.
Upstart is among the most attractive hypergrowth stocks out there. Indeed, I think this is a company with excellent prospects over the long-term. Accordingly, investors able to pick this stock up on a dip may want to do so.
The online U.S. sports betting market comes with incredible long-term growth potential. As more states legalize online sports betting, companies like DraftKings stand to benefit.
As a leader in the digital sports betting business, DraftKings touts a valuation just under $20 billion at the time of writing. That’s hefty, for any sector. However, expectations are that the digital sports betting market could be a $40 billion market opportunity in the near-future. Should DraftKings continue to capture more market share over time, this is a stock with the potential to grow into its valuation.
With this backdrop, DraftKings recently reported some impressive numbers. The company registered revenue growth of 320% year-over-year, to nearly $300 million this past quarter. On a forward-looking run rate, this makes DraftKings’s valuation seem not so shabby after all.
As restrictions continue to ease on this sector, there’s a bullish outlook for DraftKings and its peers. Of course, competition in this sector remains steep. However, DraftKings’s business model is among the best-in-class. Accordingly, this is a top hypergrowth stock in this space investors are looking at right now.
Riot Blockchain (RIOT)
In the crypto world, bitcoin miners such as Riot Blockchain are among the hypergrowth stocks investors are looking to for gains.
Indeed, such a view makes sense. Cryptocurrency prices remain strong, and all indications are this is a sector that may not slow down any time soon.
Of course, like any crypto investment, RIOT stock remains heavily reliant on high crypto prices to remain profitable. Accordingly, there’s a level of risk with this stock that’s among the highest on this list.
That said, RIOT stock has been a near-10-bagger over the past year. As the crypto sector has come into focus for more investors, crypto miners like RIOT have seen increased interest. These companies provide “picks and shovels” exposure to an impressive growth sector. For those not looking to bet the farm, there’s an argument to be made about putting a little money to work in a company like Riot.
This Bitcoin miner has noted it has a hash rate of 2.2 exhash per second. Via a series of investments, the company believes it can get this number up to 7.7, roughly 3.5-times higher than it is today.
For those bullish on where crypto prices are headed, RIOT stock is an intriguing hypergrowth play to consider right now.
First Solar (FSLR)
Another company looking to take advantage of the aforementioned electrification trend is First Solar. As the company’s name denotes, this is indeed a solar energy play. A company that has benefited from dramatically falling costs for solar panels, First Solar has become a profitability machine in recent years.
That’s hard to find in today’s market — an aspirational renewable energy company with tons of earnings and cash flow generation.
Accordingly, this is a hypergrowth stock I’m looking at not necessarily from a top line point of view. Rather, it’s First Solar’s bottom line I think provides the most attractive story for investors.
This earnings growth has propelled FSLR stock to a price-to-earnings multiple of under 19-times. That’s cheap for a company with this kind of growth potential.
Indeed, given the increased investment from the U.S. government to continue electrifying the American economy, First Solar is one of the lower-risk, higher-upside picks in the market right now. Accordingly, hypergrowth investors may want to give this stock another look.
Booking Holdings (BKNG)
Perhaps the fastest-growing pandemic reopening play on this list, Booking Holdings has managed to not only eclipse its pre-pandemic stock price levels, but continue on to recent all-time highs.
Accordingly, it’s clear where the sentiment lies with this U.S. travel-oriented tech company. As global tourism continues to pick up, Booking Holdings stands to be a key beneficiary of this trend. Indeed, I view this growth stock as one that ought to be included in the hyper-growth category, at least for the next few years.
Well, this is a company that doesn’t necessarily blow out earnings expectations even in good times. However, recent bookings growth of around 450% year-over-year highlight the pent-up demand for travel. This past quarter alone, the company brought in $22 billion in bookings. Accordingly, as Booking Holdings brings in more revenue in the near-term, this stock is likely to start looking cheaper and cheaper to growth investors.
Accordingly, this is a stock I think investors may want to get in front of.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.