Many investors flock to growth stocks for consistent returns and high overall yield increases when the companies perform well. While some growth stocks suffer from high volatility, they can typically bounce back during harsh economic conditions. By holding them over time, investors also enjoy the return when these companies reach new heights.
For example, each of the following companies have established a strong foothold in their respective markets. Further, they currently demonstrate excellent success, and projections indicate continued long-term prosperity.
Let’s learn about the impressive demand, smart business models and diverse offerings propelling these stocks upward.
Crowdstrike (CRWD)
With digitalization at an all-time high, the demand for cybersecurity amongst businesses and consumers subsequently increases. Texas-based Crowdstrike (NASDAQ:CRWD) holds a perfect position within the cybersecurity market to profit from this uptick. In fact, it has been riding a surging trend for over a year.
What makes Crowdstrike such an excellent growth stock is its solid earnings and the years of experience over newer cybersecurity players. Crowdstrike has been in the game since 2011 and has one of the most effective cutting-edge artificial intelligence (AI)-integrated platforms available, its Falcon platform.
Also, Falcon’s years of data-gathering history vastly improves the functions of its AI capabilities. However, more than speculation, the effectiveness of Crowdstrike’s platform is demonstrated in the numbers. Crowdstrike smashed earnings estimates and brought in revenue just short of $1 billion at $921.04 million in Q1.
Moreover, customer loyalty and spending per customer continue to grow, meaning that every subscriber in their growing base spends incrementally more. The company has grown exponentially since its start and only shows a steeper upward curve.
For growth investors, a hot, in-demand stock like Crowdstrike is a no-brainer and an excellent addition to any portfolio.
Shopify (SHOP)
Shopify (NYSE:SHOP) is leading the charge for businesses transitioning their stores to digital or those looking to enhance their e-commerce sites. Online shopping has never been more popular, meaning businesses everywhere need a platform like Shopify to keep up with the times.
Not only does Shopify have steady, solid subscription revenue, but it also has several other streams, from payment processing to shipping labels and its app store. Shopify has seen tremendous growth in recent years and has impressive earnings that display just how profitable the business can be.
In Q1, Shopify beat revenue estimates, reaching $1.9 billion in revenue and demonstrating a 23% increase year over year. Of this revenue, $1.4 billion comprised revenue from Merchant solutions and the remainder from subscriptions. It is a comfortable spread, considering most of Spotify’s services are geared towards e-commerce merchants.
The good news for investors is that the stock is valued better than ever, slightly below its peak price. Spotify will only continue to grow as it implements AI solutions and services targeting larger-scale businesses in its lineup, and investors do not want to let this chance pass them by.
Netflix (NFLX)
Globally renowned streaming giant Netflix (NASDAQ:NFLX) has seen its fair share of ups and downs over the years. However, it has never been unable to bounce back from short-term losses and continues to prove itself as a top growth stock year after year.
Furthermore, Netflix’s most recent news should excite growth investors looking for a long-term buy – its new business model. Now that the company is generating healthy cash flow and revenue, it has announced a strategy focusing less on gaining subscribers and more on earning profit. The company will cease reporting quarterly subscriber counts but shift toward revealing engagement numbers, or actual time viewers spend using the service.
In Q1, Netflix reported a 15% growth in revenue year-over-year and $5.28 in earnings per share, up from $2.88 last year. The company expects very similar growth for Q2 and the remainder of 2024.
At $685 per share, Netflix isn’t a cheap stock. But it’s on track to maintain excellent growth at an incredible pace. Therefore, a big investment now will likely mean a big return in the future.
On the date of publication, Joel Lim 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.
