There are a lot of growth stocks that investors can buy at discounted prices right now. These are companies whose long-term growth potential remains huge despite near-term market volatility. And now is the time for investors to load up on the shares of growth stocks before markets bottom and a new, reliable bull market takes hold.
Growth stocks were largely abandoned by investors in 2022 as investors fled into the safety of cyclical and established blue-chip names. However, there’s evidence that a rotation back into growth stocks is now underway, with hedge funds and institutional investors wading back into equities that have the potential to grow and provide shareholders with strong returns. While markets continue to gyrate and a firm bottom might not be in just yet, a sea change is on the horizon. With that in mind, here are seven growth stocks to invest in now.
|PANW||Palo Alto Networks||$188.74|
Airbnb (NASDAQ:ABNB) just reported its first annual profit and a blowout quarter that proves the company is in full growth mode coming out of the pandemic. For the fourth quarter of 2022, Airbnb reported earnings per share of 48 cents compared to 25 cents that was forecast, on average, on Wall Street.
The firm’s Q4 revenue amounted to $1.90 billion versus analysts’ mean outlook of $1.86 billion. The San Francisco-based company’s Q4 net income soared 480% year-over-year to $319 million.
The strong financial results have contributed to a 43% gain by Airbnb’s stock in 2023. However, its share price has dropped 23% over the last 12 months.
Looking ahead, Airbnb sees sunnier days ahead, as it noted that its bookings jumped 20% last quarter versus the same period a year earlier. It provided Q1 revenue guidance of $1.75 billion to $1.82 billion, above the $1.69 billion that analysts, on average, had expected.
Despite the ongoing drama and volatility that electric-vehicle maker Tesla (NASDAQ:TSLA) is undergoing, it remains a growth stock. The company faces numerous challenges, including rising competition from traditional automakers, slowing demand for its vehicles in China, and cost pressures.
But despite it all, Tesla continues to find ways to grow, defying the expectations of analysts and investors. The company’s latest earnings report was a mic drop that included record revenue and EPS. that was better than analysts, on average, had expected.
While the owners of TSLA stock spent the fall worrying that CEO Elon Musk was overly distracted by Twitter, the electric-vehicle maker stunned everyone by reporting record fourth-quarter revenue of $24.32 billion and EPS of $1.19, which was six cents better than analysts’ mean estimate.
The company has slashed its prices to help spur demand around the world and has several new vehicles on the horizon, including its much-hyped Cybertruck,. that can boost its growth further going forward,
After a bruising autumn, TSLA stock has gained more than 80% so far in 2023.
S&P Global (SPGI)
Headquartered in New York City, S&P Global (NYSE:SPGI) is a leading credit- rating agency and a top publisher of financial research, including stock analysis. The company created the S&P 500 index and collects a royalty anytime a mutual fund or exchange traded fund (ETF) replicates the index for investors to access. The company has been around since 1860, has consistently innovated over the decades, and today employs nearly 40,000 people. It has also grown to become the biggest credit rating agency in the world.
While S&P Global isn’t new, the company and its stock are growing steadily. S&P Global got bigger in 2022 by acquiring IHS Markit, which enlarged its financial research business. Analysts who cover the company forecast, on average, that S&P Global will grow its EPS by a mean annual rate of 13% in the next five years. CEO Douglas Peterson has stressed that S&P Global remains firmly focused on “investments in growth and innovation.”
These investments have helped to propel SPGI stock 80% higher over the last five years. The share price is up 4% this year.
Nu Holdings (NU)
A more traditional growth name is Brazilian online bank Nu Holdings (NYSE:NU). The company is in rabid growth mode as it battles to gain market share across Latin America with its credit cards and loans.
The efforts of the lender are starting to pay off as it just reported blockbuster earnings. In Q4, the digital bank’s gross profit rose 137% year-over-year to $578.3 million, while its revenue amounted to $1.45 billion. For all of 2022, Nu Holdings booked record revenue of $4.8 billion. Its Q4 net income came in at $113.8 million.
Perhaps most impressive to analysts was the fact that Nubank added 4.2 million customers last quarter, finishing 2022 with a total of 74.6 million customers worldwide. Its monthly average revenue per active customer increased to $8.20 in 2022, growing by 37% over the previous year. The massive growth of Nu Holdings has caught the attention of several notable investors, including Warren Buffett who has $500 million of NU stock.
Nu Holdings went public in December 2021 just as markets turned south. Since its market debut, NU stock has fallen 60% . Regardless, the company’s future growth potential seems strong and worth considering.
Retail giant Costco (NASDAQ:COST) is essentially a bulletproof company. The warehouse club performs well in any economic environment. And although COST has been in business since 1976, it continues to grow its earnings and retail network at an impressive rate. Consider that in its fiscal first quarter that ended in November, Costco’s net sales grew 8.1% year-over-year to $53.44 billion. Its U.S. comparable sales increased 9.3% versus the same period a year earlier.
Additionally, analysts are forecasting that the company’s EPS will increase by an average annual rate of 10% for the next five years. Meanwhile, Costco has plans to open 24 new stores in 2023, including 15 new locations in the U.S.
The continued growth and popularity of its membership model has made Costco the envy of the retail world and a great stock to own for the long term. So far in 2023, COST stock has gained 8%.
If there’s an energy company that can still cut its costs and boost its growth, it is likely Suncor Energy (NYSE:SU). The Canadian oil and gas producer just named former Exxon Mobil (NYSE:XOM) executive Rich Kruger as its new president and CEO. Kruger’s appointment comes after Suncor was targeted last year by activist investor Elliott Management. The folks at Elliott Management have wasted no time overhauling Suncor’s management and its board of directors.
Elliott Management has been pushing Suncor to boost its growth and unlock shareholder value through cost cutting and improving its balance sheet. To that end, Elliott has been pushing Suncor to sell its retail network of 1,500 Petro-Canada gas stations that’s estimated to be worth $11 billion. Helped by its internal changes and elevated oil prices, Suncor’s earnings have been on a tear in recent quarters.
During the second quarter of last year, when crude oil prices were at their peak, Suncor’s net profit rose more than 400% to $3.99 billion from $868 million during the same period a year earlier. SU stock has risen 15.5% over the last 12 months.
Palo Alto Networks (PANW)
Founded in 2005, cybersecurity firm Palo Alto Networks (NASDAQ:PANW) is not a new company. But it is growing, taking market share, and outperforming like a start-up. The company’s latest earnings report was spectacular and pushed the stock up 10% in a single trading session. So far in 2023, PANW stock has jumped 35%. The surge came after the firm reported earnings per share of $1.05 versus analysts’ average estimate of 78 cents.
Palo Alto Networks has now posted three consecutive quarters of profitability after more than a decade of red ink. The company achieved profitability ahead of schedule, has issued bullish forward guidance, and continues to use acquisitions to boost its growth.
In the final months of 2022, Palo Alto Networks acquired start-up Cider Security, which focuses on software supply chain and application security. Over the last five years, the company has spent more than $3 billion on acquisitions as it seeks to boost its growth.