High risk high return stocks can supercharge your portfolio returns. Typically, they are smaller stocks with huge potential. They might have a better product challenging incumbents, an innovation, or serve an under-penetrated niche. If the expected growth is sustainable, these high reward stocks can become multi-baggers.

However, these higher returns also come with plenty of risks. First, these are smaller companies that might lack the capital, human resources and innovation of larger peers. Thus, an established competitor might aggressively squeeze them out of the market.

Secondly, although they might have revenue growth, most of these high stakes stocks lack profits. In some cases, they might not even produce free cash flow. The market can ignore this if the company maintains a higher growth rate. But poor profitability might indicate poor management, lousy execution or an improper capital structure. Eventually, it can threaten the survival of the firm.

Thus, when investing in high risk stocks, you must be aware of the potential pitfalls. However, if successful, the returns can be life-changing. Here are three high risk high return stocks already reporting record revenues that might dominate their categories in the future.

Celsius Holdings (CELH)

Celsius Holdings (NASDAQ:CELH) is an energy drink company that offers various carbonated and non-carbonated drinks. It sells its drinks under the Celsius brand providing multiple flavors. The company primarily competes with established energy drink brands Redbull and Monster Beverage, as well as soft drink brands.

Since its launch in 2005, Celsius has marketed its health benefits. Its claim of boosting metabolism and workout efficiency has made it a favorite among wellness enthusiasts.

Due to surging demand for Celsius, revenue growth has been gangbusters. In 2020, 2021 and 2022, revenues grew at 73%, 140%, and 107%, respectively. Now the company is no longer a start-up, having recorded sales of $780 million in fiscal year (FY) 2022.

At the start of FY2023, the beverage brand stormed out of the gates with impressive results. In the first quarter, revenues grew 46% sequentially to a record $259 million. In terms of year-over-year (YOY) growth, sales accelerated from 70.70% in Q4 FY2022 to 94.87%.

Luckily for investors looking for high risk high return stocks, the growth trend seems sustainable. Growth in the first quarter was due to volume growth rather than price hikes.

The energy drink segment is still growing, and Celsius is growing faster than its peers. Wedbush analyst G. Pascarelli recently raised earnings estimates, citing accelerating sales according to Nielsen data. For the four weeks ending June 17, Celsius posted 149.4% dollar sales growth and gained 410 basis points of market share.

The growth outlook is even more promising from now on. In FY2022, international sales made about 6% of total revenues. But with the recently signed distribution agreement with Pepsi, the next growth phase might have started. Celsius will leverage Pepsi’s global footprint and go-to-market capabilities to accelerate growth globally.

e.l.f. Beauty (ELF)

Historically, beauty has been a low-growth category. However, e.l.f. Beauty (NYSE:ELF) has bucked the trend and is one of the best high risk high return stocks to buy.

The Oakland, California-based company sells cosmetics, including eye, lip, face, and skincare products. It has adopted a different strategy that has led to tremendous growth.

Unlike peers like Estée Lauder (NYSE:EL) that sell premium beauty products, the company has targeted the lower-end market. With the help of effective digital marketing, it’s gaining share among young consumers, especially Generation Z.

TipRanks analysts have been bullish and are raising price targets. They expect continued revenue growth from share gains as consumers trade down to cheaper brands. Moreover, they expect the company to secure more shelf space and capture more opportunities among current customers.

This thesis is playing out perfectly, as fourth-quarter FY2023 earnings showed. Revenue grew 78.3% YOY to $187.4M, beating estimates by $31.28 million.

Management highlighted the share gains and potential growth.

“We gained 270 basis points of market share in the quarter and increased our ranking to the number three U.S. Mass Cosmetics brand for the first time, according to Nielsen. As we look ahead, we believe we are still in the early innings of unlocking the full potential we see for e.l.f. Beauty,” said Tarang Amin, the CEO.

For FY2024, management guided for $705-720 million in net sales. This target represents 22% annual growth. Considering the slower growth among peers, this is one of the best high risk high return stocks in the beauty industry.

Enovix (ENVX)

While the previous two high risk high return stocks have had solid revenues for years, Enovix (NASDAQ:ENVX) has just begun generating them. Thus, it’s a riskier investment. But investors looking for a 100-bagger might have a chance with this high potential stock.

Enovix has developed proprietary lithium battery technology that utilizes a unique cell architecture. Their innovative architecture improves thermal performance and enables the use of 100% active silicon anode. As a result, tests have shown that their batteries provide a higher energy density and capacity.

In Q1 FY2023, the company exceeded its production forecast of 9,000 batteries producing 12,000 batteries in its Fab1 location in Fremont. And the company is implementing plans to ramp up production with a second fab in Malaysia.

On June 15, the company announced it had exceeded its second-quarter production target of 18,000 units. Management also reiterated that Fab 1 could produce 180,000 batteries in 2023. To meet these expectations, production must double every quarter.

Meanwhile, their Malaysia Fab 2 is already making good progress toward production. By 2024, it will be ready to produce batteries. At full capacity, the plant will produce more than 9 million batteries annually.

Expanding capacity will enable the company to sign agreements with large OEMs. Already, the company is receiving some orders. For instance, the company recently announced an agreement to deliver commercial cells to the U.S. Army.

Given the massive opportunity, it’s time to buy ENVX stock before the material ramp-up in production next year. Besides, insiders are buying the stock, an extra vote of confidence.

On the date of publication, Charles Munyi 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.