Investors looking to aggressively grow their portfolio should hunt for hypergrowth stocks. These are stocks that have outperformed the market by a wide margin, in some cases doubling their share price in a year and rising by more than 500% in five years. Some analysts and investment educators define hypergrowth stocks as companies that have a compound annual growth rate (CAGR) above 40%, which is double the 20% CAGR that is achieved at a typical growth company. This has led the rise of hypergrowth stocks to buy.
Regardless of how they are defined, hypergrowth stocks can be the best way to grow investments. Another nice feature of hypergrowth stocks is that they tend to outperform the market whether we’re in a bull or bear cycle. Driven by exceptionally strong earnings, hypergrowth stocks tend to go in only one direction: up. Here are seven hypergrowth stocks to buy for a new bull market.
Celsius Holdings (CELH)
In the energy drink market, Monster Beverage (NASDAQ:MNST) tends to get all the attention. But rival Celsius Holdings (NASDAQ:CELH) is no slouch. The company that makes drinks to help people accelerate their metabolism and burn body fat has taken off in recent years. In the last 12 months, CELH stock has gained 155%. Through five years, the company’s share price has increased a remarkable 2,751%. The incredible performance has been driven by soaring consumer demand and record earnings. This makes the brand one of those hypergrowth stocks to buy.
In May of this year, Celsius Holdings reported record revenue of $260 million, which was up 95% from a year earlier and miles ahead of Wall Street consensus forecasts. Analysts scrambled to revise higher their price targets on CELH stock following the blowout quarter. Many analysts have conceded that the energy drink market has exceeded all expectations in terms of growth. Celsius is quickly gaining market share in the energy drink market that generates global sales of more than $150 billion annually, according to Statista.
MongoDB (MDB)
MongoDB (NASDAQ:MDB) is an American software company that has been in hypergrowth mode for years. So far in 2023, MDB stock has nearly doubled (up 97%). Over the last five years, the share price has increased 560%, outpacing much larger and better known tech names. Since going public in 2017, the stock has increased 1,125%. The secret to success? Demand is skyrocketing for MongoDB’s main cloud-based Atlas database software, which is open source and can be downloaded and run from virtually anywhere.
MongoDB had more than 40,000 paying customers for its database management software in this year’s first quarter. And almost all of those companies view the software as essential to their operations. This helps to explain why there hasn’t been a slowdown in sales at MongoDB. The company’s revenue grew by nearly 30% year-over-year in Q1, while revenue for the Atlas product increased nearly 40%. Despite the huge run in MDB stock, analysts see more runway ahead. The median price target on MongoDB’s shares is 6% higher than current levels.
Roblox (RBLX)
Online video game developer Roblox (NYSE:RBLX) stock has come roaring back after getting hit hard coming out of the Covid-19 pandemic. Year-to-date, RBLX stock has risen nearly 40%. The bull run this year is an encouraging sign, especially since the company, which has only been publicly traded for two years, has a lot of growth potential ahead. Roblox, which allows online users of its platform to create their own video games and play those created by others, generates revenue from subscriptions, advertising and licensing deals.
While Roblox remains unprofitable, it continues to be in hypergrowth mode. Users spent 14.5 billion hours interacting with content on Roblox in this year’s first quarter, up 23% from a year ago. Revenue in Q1 totaled $774 million, which exceeded the consensus forecasts of analysts. While Roblox remains wildly popular with kids, the company is now chasing adult customers, announcing recently that creators can create mature content for users aged 17 and older that may include blood, violence, alcohol and romantic themes.
Arista Networks (ANET)
Another fast growing tech company that might be flying under investors’ radar is Arista Networks (NYSE:ANET). The company makes network switches that are used in data centers, cloud computing, and for high-frequency trading. While a lesser known tech concern, Arista Networks’ share price performance has been excellent. Over the last 12 months, ANET stock has grown 63%. Through five years, the shares have increased 122%.
Like many hypergrowth stocks, Arista Networks share price has been pushed higher by exceptional earnings. For Q1 of this year, the company reported earnings per share of $1.38. Revenue in the period came in at $1.35 billion. Both numbers beat Wall Street expectations. For the current second quarter, Arista Networks forecast revenue of $1.35 billion to $1.40 billion. Beyond the earnings, many analysts expect ANET stock to benefit from moving forward from the use of its switches in artificial intelligence applications and platforms. This makes the company one of those hypergrowth stocks to buy.
MercadoLibre (MELI)
Shares of South American e-commerce giant MercadoLibre (NASDAQ:MELI) continue to defy gravity and analysts’ expectations. The company, based in Argentina, has seen its share price climb 316% in the last five years, including a 79% gain in the past 12 months alone. MELI stock has trounced the performance of its American rival Amazon (NASDAQ:AMZN), which is up 45% in five years. MercadoLibre has managed to outperform due to ballooning profits.
Last year, MercadoLibre’s revenue increased nearly 50% from a year earlier to $10.5 billion. Its 2022 net profit rose an amazing 480% to $482 million from $83 million the year before. Much of the company’s growth is being powered by its online payments unit, Mercado Pago, which saw volumes rise 60% last year. For Q1 2023, MercadoLibre announced that its net income more than tripled from a year earlier to $201 million, which beat Wall Street forecasts of $154 million by a country mile. The growth at MercadoLibre shows no signs of slowing.
Ferrari (RACE)
People sure do love their Ferraris. Strong demand among wealthy consumers has helped to make the Italian luxury carmaker a hypergrowth stock. Ferrari (NYSE:RACE) is a comparatively small automotive manufacturer. The company makes less than 10,000 vehicles a year compared to more than 10 million made by Toyota (NYSE:TM), the world’s biggest automaker. However, patrons are willing to pay a premium for a Ferrari sports car and wait years to take possession. And that has allowed Ferrari to zoom ahead of other vehicle stocks.
This year, RACE stock is up 43%, bringing its five-year gain to 121%. Only electric vehicle maker Tesla (NASDAQ:TSLA) has performed better than Ferrari since 2018. In May the company posted excellent Q1 results that showed its profit rose 24% from the previous year and its vehicle shipments increased 10%. The wait list to get one of Ferrari’s distinctive red and black colored sports cars now extends into 2025. The company has also begun taking orders for a new SUV model called the Purosangue that has a starting price of $400,000. Thus, one can consider this one of those hypergrowth stocks to buy.
Nvidia (NVDA)
At this point, there seems no escaping artificial intelligence (A.I.). The technology has taken markets by storm and looks likely to remain a growth driver for many years to come. No more so than at microchip and semiconductor company Nvidia (NASDAQ:NVDA). This year, NVDA stock has gained 200%, much of that increase coming directly from the hype surrounding A.I. However, Nvidia was a strong growth stock before A.I. broke through to the mainstream. Over the last five years, the stock has accelerated by nearly 600%.
Nvidia’s share price really began to stampede after the company announced Q1 earnings in late May that blew away analysts’ forecasts, and lifted its forward guidance by more than 50%. Almost all of the outperformance was attributed to demand for microchips that can power the latest A.I. technologies. Nvidia executives see A.I. chips largely powering its earnings moving forward, which has led investors eager to jump on the artificial intelligence bandwagon to pile into the stock.
On the date of publication, Joel Baglole held a long position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
