Over the past years, AI and GLP-1 stocks have been the major themes that have drawn the most attention. However, plenty of other investments have been working and flying under the radar in this market.
Some examples are the three growth stocks to watch discussed below that have been doing extremely well. They continue to execute flawlessly and would be valuable additions to any portfolio.
Looking at their recent quarterly results released over the past two weeks, the case for these growth stocks to watch becomes a no-brainer. All three delivered over 20% revenue growth, highlighting the tremendous demand they are seeing.
Additionally, management provided very positive commentary on forward growth prospects.
The three also delivered on profitability, an area investors have focused on in this high-interest-rate environment.
With EPS and net income growth surging, the price momentum in these growth stocks to watch will continue. Any weakness is an opportunity to add to these growth stars.
Deckers Outdoor (DECK)
In its Q1 2025 results, Deckers Outdoor (NYSE:DECK) once again demonstrated that its leading innovations were helping it outperform in a challenging sector. Indeed, as Nike (NYSE:NKE) continuously disappoints, the maker of Hoka and Ugg has been a bright spot.
First quarter 2025 results released on July 25 highlighted tremendous demand and pointed to an exciting future for Deckers. Due to robust full-price demand for its compelling products, revenues soared 22% year-over-year to $825 million.
Net sales of its star brand, Hoka, were even better, increasing 29.7% to $545.2 million. These numbers are a testament to management’s solid execution, considering Deckers purchased Hoka in 2012 when it had less than $3 million in annual sales.
Deckers Outdoor report was even better on the profitability front. Gross margins were 56.9% compared to 51.3% in Q1 2024 and operating income increased from $70.7 to $132.8 million. This drove an impressive 87% increase in diluted EPS to $4.52.
Additionally, management provided positive guidance predicting net sales to increase by 10% in FY2025. They also raised the EPS range to $29.75-$30.65, which means Decker is trading at 30 times forward earnings.
If Hoka continues its momentum, Deckers will easily exceed its guidance, making DECK stock a bargain.
TransMedics (TMDX)
TransMedics (NASDAQ:TMDX) is one of the rare growth gems in the healthcare sector. It is improving transplant outcomes through its Organ Care System technology and National OCS Program services. Notably, the usage of its technology led to a 12% increase in U.S. heart and liver transplants in 2023.
Due to the efficacy of its technology, TransMedics is becoming a trusted partner to transplant stakeholders. Its services are vital for transplant retrieval surgeons and hospitals in accessing and recovering donor organs.
As a result, the company is seeing tremendous demand for its OCS and NOP services.
Fueled by this demand, Q2 2024 results blew past estimates, with the company reporting a 118% YOY growth. Revenues were $114.3 million compared to $52.5 million in the prior year. This increase was driven by an increase in the utilization of OCS and NOP as well as additional revenue from the recently launched TransMedics logistics service.
The company also increased its full-year revenue guidance to $425 million to $445 million, representing 76% to 84% growth over 2023.
The impressive guidance means TransMedics is one of the best growth stocks to watch.
Management plans to increase OCS adoption and sees growing U.S. transplant volumes as a multi-year tailwind.
Wingstop (WING)
Restaurant stocks have seen mixed fortunes this year. While chains like McDonald’s (NYSE:MCD) and Starbucks (NASDAQ:SBUX) struggle with declining traffic and same-store sales, others are thriving. Wingstop (NASDAQ:WING) is in the latter camp and is one of the top growth stocks to watch.
On July 31, the restaurant delivered an impressive quarter, highlighting its industry-leading growth. Domestic same-store sales increased 28.7%, powered by transaction growth.
As a result, revenues increased by 45.3% to $155.7 million. Average unit volume — the average annual revenue for each location — exceeded $2.0 million from $1.5 million two years ago.
In a sea of value offerings, where competitors are scrambling to launch value menus to attract traffic, Wingstop is seeing robust demand.
CEO Michael Skipworth noted that they saw growth across all income cohorts and did not see any trade-down. Moreover, Wingstop is attracting new guests at a record pace and converting them into frequent buyers.
Over the long term, Wingstop sees a massive growth opportunity due to several factors. First, management has set a new target of $3 million in average unit volume.
Secondly, the company sees a total unit opportunity of 6,000 stores in the U.S., a triple the current store number.
Lastly, the restaurant aims to use its digital capabilities to improve personalization, boosting revenues further.
On the date of publication, Charles Munyi did not hold (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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
