Due to its sheer velocity, growth investing is one of the best ways to grow one’s portfolio. While hyper-growth stocks don’t typically include attractive dividends, they compensate by providing higher-than-average returns. However, growth investing requires a lot of strategic planning. It involves looking for signs like growing revenue and earnings in these companies, which are essential to ensure you only choose the ones that can sustain their growth for the long term. So, we have three of the most attractive hyper-growth stocks for your consideration.
NAPCO Security Technologies (NSSC)
NAPCO Security Technologies (NASDAQ:NSSC) is one of the leading names in the electronic security industry. The company has a diversified list of products, including door-locking products, electronic security devices and fire alarm systems. Its products are used in residential, commercial, government and industrial applications and sold globally to different contributors. The company previously announced the release of the multi-award-winning Prima 7″ Panel that provides video, security and automation in one device.
On February 5, 2024, NSSC reported a significant 191% rise adjusted EBITDA compared with the same quarter, one year ago. The company also saw a record-breaking net income surge 221% YOY. Recurring service revenues also jumped 25% YOY to $18.5 million. On top of excellent YOY growth, NAPCO has also consistently met or exceeded EPS estimates, with the latest one ending at a 30.77% surprise. And as noted in its quarterly report, the company has “no debt as of December 31, 2023.”
All these are excellent markers of a growing company. Investors interested in jumping into NAPCO Security Technologies might find it a worthy addition to their portfolio of hyper-growth stocks.
Sprinklr (CXM)
A solid customer support strategy is one of the key drivers of company growth. That’s why companies offering unified, AI-powered customer service solutions, like Sprinklr (NYSE:CXM), are wildly in demand.
CXM offers enterprise software solutions that combine customer service, social media management, online marketing and data analytics in one platform. Its platform integrates many communication media, including social media sites, blogs, review sites and live messaging applications, for a complete experience. Enterprise customers also have the option to build their apps with Sprinklr’s platform and launch them across supported devices.
CXM’s latest quarter has demonstrated why it is one of the best hyper-growth stocks to watch. Revenue increased 18% YOY, driven by subscription revenue surging 22% to $170.5 million YOY. Future revenue via RPO or remaining performance obligations also saw a 34% bump. The company’s high-paying clients also saw a 15% increase YOY .
The outlook for the fourth fiscal quarter and full fiscal year ending January 31, 2024, is optimistic. The company expects total revenue to reach between $187.5 million and $189.5 million for Q4 and between $725.5 million and $727.5 million for the full fiscal year.
Weave Communications (WEAV)
A business telephony system for healthcare providers, Weave Communications (NYSE:WEAV) offers a communications platform for small and medium healthcare businesses that allows its clients to streamline day-to-day operations within the business. Its products offer features like Weave Text Messaging, Web Assistant, Weave Email Marketing and more. The company has announced integrating its platform to expand its offerings further into veterinary practices.
WEAV displays a commitment to growth through its strategic partnerships. It recently integrated with 4th Dimension EMR with its services to expand customer experience in the plastic surgery market. Additionally, its partnership with Affirm (NASDAQ:AFRM) for flexible payment options and its introduction of “Scan to Pay” for streamlined transactions greatly contribute to its competitive edge.
According to Weave’s Q3’23 financials, total revenue grew 20.2% YOY, reaching $43.5 million. GAAP gross margins also increased to 68.7% from 64.1%. WEAV is relatively new, so it’s understandable that it’s still operating at a loss — new hyper-growth stocks tend to do that during periods of expansion. The good thing about the company is that it is narrowing down its EPS losses while exceeding analyst estimates. The most current EPS reported ended at -$0.10, improving from -$0.18 YOY. The reported EPS also represents a 28.57% surprise.
Weave also grew its customer base to cover over 30,000 locations this quarter. CEO Brett White attributes its success to its tailored software and solid demand from well-capitalized SMB healthcare customers. WEAV updated its financial outlook for the remainder of the year and expects its total revenue and non-GAAP loss from operations to align with its projections. WEAV’s consistent revenue improvements and expanding customer base are excellent signs for further expansion, making it a good candidate for hyper-growth stocks.
On the date of publication, Rick Orford 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.
