Today I am discussing the six most aggressive growth stocks to buy. They reflect huge potential growth in their sales and/or their earnings. That means their valuations may be quite high, reflecting optimism about that growth.
Aggressive growth stocks tend to get bid up due to the market’s enthusiasm over the company’s future prospects. Typically, this relates primarily to sales growth trajectories. As a result, many of these stocks have high price-to-sales multiples.
Moreover, in many cases, the high-growth stock does not have positive earnings yet. Or it may have very low adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) figures. As a result, the price-to-adjusted EBITDA, or enterprise value (EV)-to-adjusted EBITDA multiples typically are high.
EBITDA is sort of a “poor man’s earnings.” It cuts corners to try to show that the company has positive income. But that company’s actual net income, and even its cash flow, are often negative.
For example, by cutting out the real cash costs of interest and taxes, which most companies have to pay, EBITDA shows profitability. But after deducting interest and taxes, in many cases, the company is not profitable.
Some investors even prefer to invest in higher-multiple EBITDA stocks since they assume that this signals the underlying company is growing quickly.
Let’s dive in and look at these aggressive growth stocks.
|RADI||Radius Global Infrastructure||$14.70|
Glaukos Corp (GKOS)
Glaukos Corporation (NYSE:GKOS) is a medical technology and pharmaceutical company focused on the micro-invasive glaucoma surgical (or MIGS) space. Its products (along with surgery) help address mild to moderate glaucoma. Since the end of Covid-19, elective surgeries have rebounded, and this has helped Glaukos Corp.’s sales.
For example, sales in 2021 were $294 million, but they are forecast to be lower this year at $274.4 million. However, next year analysts forecast sales to rise by 14% to $312.9 million, according to a survey of 10 analysts by Refinitiv (seen in Yahoo! Finance).
As a result, with its $2.2 billion market valuation, the stock trades for 8x revenue for this year, and up to 7x sales for next year.
Glaucoma is caused by high pressure on the optic nerve and typically occurs with older people. But as America’s population continues to age, with Baby Boomers nearing their 80s, glaucoma will become more prevalent. As a result, this is a growth company. However, Glaukos Corp is not profitable yet and it is not yet projected to be for quite some time.
All this makes Glaukos Corp one of the most aggressive growth stocks.
Livent Corp (LTHM)
Livent Corporation (NYSE:LTHM) makes lithium compounds used in lithium-ion batteries and high-purity lithium metal. The latter is used in non-rechargeable batteries and the production of lightweight materials for aerospace applications.
Lithium prices are elevated as a result of the tremendous growth in battery electric vehicles (BEV) as well as the growing application of solid-state lithium metal batteries. In short, this is a growth industry and will likely be so for the next decade or longer.
As a result, analysts project sales will reach $1 billion in 2023, up from $420.4 million in 2021. As a result, the stock trades for 10x historical sales, and 4x forecast sales for 2023.
However, its profitability is low but earnings per share (EPS) are forecast to rise over 25% by 2023 to $1.53 per share. That puts the stock, at $21.43, as of July 11’s close, at 17.6x 2022 and 14x earnings for 2023.
This makes it expensive, but not too much given its growth outlook. This makes this stock one of the top aggressive growth stocks to buy in July.
SiTime Corporation (SITM)
SiTime Corporation (NASDAQ:SITM) makes resonators and clock integrated circuits (ICs), and various types of oscillators used in ICs. These are key products for chipsets, motherboards, ICs, and all kinds of semiconductor-based products, including computers, servers, GPUs, etc.
Given the high demand for these basic chips, revenue is soaring. Analysts forecast sales will rise around 50% this year to $327.6 million from $218.8 million in 2021.
And for 2023, six analysts surveyed by Refinitiv (Yahoo! Finance) see sales rising on average by 22% to almost $400 million. This means that sales will have almost doubled in two years. The same could happen by the end of 2024.
This puts the stock on a price-to-sales (P/S) multiple of almost 10x for 2022 and 8x for 2023.
Moreover, EPS is seen growing over 16% in 2023 to $5.06, putting the stock on a forward P/E multiple of over 29x earnings, down from 34x for 2022.
The stock is up 24% over the past year, but YTD it’s down over 50%. That makes this stock a potential upside winner and one of the best aggressive growth stocks on this list.
Silicon Labs (SLAB)
Silicon Laboratories (NASDAQ:SLAB) is a fabless semiconductor maker that specializes in wireless microcontrollers and sensor products. These are used in the Internet of Things (IoT), including connected home and security, industrial automation and control, smart metering, smart lighting, commercial building automation, and consumer electronics.
The company is in a high-growth industry and its valuation reflects that so far. For one, sales are forecast to grow 41% this year to $1.o2 billion and 16% next year to $1.18 billion. That puts SLAB stock on a price-to-sales multiple of 4.6x this year and 4x in the year to 2023.
Moreover, earnings are forecast to hit $3.64 per share this year. So at $124.19 as of July 8, its P/E multiple is high at 34.2x. With 2023 EPS forecast to hit $4.22, that puts the stock on a forward P/E multiple of 29.5x.
It remains one of the top aggressive growth stocks on this list.
Analog Devices (ADI)
Analog Devices (NASDAQ:ADI) is an integrated circuit manufacturer that specializes in software, and subsystems that leverage analog, mixed-signal, data converter products and digital signal processing technologies. The company is in a super-growth field, especially given the state of the chip industry and the lack of chips in many industries.
As a result, sales are forecast to rise over 61% this year to $11.8 billion and are initially forecast now to rise 5% in 2023 to $12.47 billion. That puts ADI stock on a forward P/S multiple of over 6x revenue.
Moreover, analysts also forecast earnings will hit $9.26 this year, up 43% over last year’s $6.46 EPS. That puts the stock on a forward 16x earnings multiple, and a lower multiple at 15x for 2023.
Radius Global Infrastructure (RADI)
Radius Global Infrastructure (NASDAQ:RADI) acquires and leases out cell phone towers in 20 countries, including the U.S. This produces large revenue growth and puts the stock on a forward P/S of 10x sales for this year and 8x for next year.
For example, revenue is forecast to be up 33.4% to $138.25 million and up by 26.7% to $175.2 million in 2023, according to the average of three analysts surveyed by Refinitiv (Yahoo! Finance).
Moreover, its earnings as measured by Funds from Operations (FFO) have been negative. That makes this one of the more disappointing situations, as it prevents investors from being able to receive any kind of dividends.
Given its growth rate, though, that could change as revenue and as a result, earnings pick up over time. This makes this one of the top aggressive growth stocks on this list.
On the date of publication, Mark Hake 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.