In this article, we will discuss the 15 Most Profitable Growth Stocks Now.
Growth stocks refer to listed companies that are growing their profits, revenue, or cash flow at a rate that exceeds their competitors and beats the overall market. Generally, these stocks are associated with new companies that are disrupting their industries and own intellectual property that gives them a competitive advantage. Companies like Tesla (NASDAQ:TSLA) and Shopify (NYSE:SHOP) are good examples of growth stocks.
Growth stocks have their unique attributes, while they rarely pay dividends or generate high profits, they are able to grow their business at a high rate. In Tesla (NASDAQ:TSLA)’s case, the company only managed to become profitable in 2020, and despite experiencing significant profit growth since then, it hasn’t distributed dividends to its shareholders. The company’s website clearly states that it does not anticipate ever issuing such a dividend because it “[intends] on retaining all future earnings to finance future growth.”
However, growth investors are not really invested in the stocks for dividends. The primary investment purpose of investing in growth stocks is benefiting from the rise in the stock price as the company continues on its growth trajectory. An investment of $1,000 in Tesla five years ago would now be worth about $5,000, representing a remarkable gain of 400%.
Beach Holiday, Hotel, Tourist Resort, Making a Reservation, Growth
Growth stocks tend to have longer-term cash flow horizons and are, therefore, more sensitive to long-term interest rates. When interest rates rise, growth stocks lose value because the discount rate used for the valuation of these stocks increases, leaving investors with a smaller present value. Hence in a rising rate environment like today, growth stocks tend to suffer the most, in contrast, value stocks become more appealing during these times due to the nature of their businesses. However, an economic downturn provides a good opportunity for investors to hand-pick good growth stocks for the future because, rest assured, as the economic cycle takes a turn for the better, growth stocks tend to lead the market rallies and provide investors with substantial gains.
In January 2022, Apple (NASDAQ:AAPL) briefly hit a $3 trillion valuation. But then, as the interest rate hikes were introduced, prices declined to erode $1 trillion from its valuation by the end of the year. Similarly, Microsoft (NASDAQ:MSFT) saw its share price decline by 30%. In 2022, while the S&P 500 was down by about 18%, the S&P 500 growth index fell by 30.1%, reflecting the effect of higher interest rates on growth stocks.
In 2023, the interest rate is expected to increase up to 5.25% or even 5.5%. But analysts expect tech firms or at least FAANG stocks to bounce back. For example, analysts predict the share price of Meta (NASDAQ:META) to rise by 8%, given that now the company has announced cost-cutting measures. If these forecasts are correct, then anyone buying the tech stock at the current prices could hope to make a good gain later in the year.
Our Methodology
To come up with 15 most profitable growth stocks now, we have used stock screeners to identify high growth profitable stocks. We filtered the stocks with at least $500 million in market capitalization and revenue growth of at least 30% YoY. The year-over-year growth metric used to screen companies calculates the percentage change from the trailing twelve months’ revenues compared to the twelve months prior. We then proceeded to rank the companies in ascending order of their Net Profit (TTM).
15 Most Profitable Growth Stocks Now
15. Super Micro Computer, Inc. (NASDAQ:SMCI)
Net Income (TTM) as of March 17, 2023: $578.38 million
Headquartered in California, United States, Super Micro Computer, Inc. (NASDAQ:SMCI) is an information technology company that provides storage and high-performance server solutions. The company’s product line includes servers, storage, workstations, gaming, networking, and building blocks. Furthermore, the company offers solutions for data management, hyper-scale infrastructure, cloud, and virtualization, etc. Super Micro Computer, Inc. (NASDAQ:SMCI) has operations in more than 100 countries.
On February 1, 2023, Nehal Chokshi, an analyst at Northland, increased the price target on Super Micro Computer, Inc. (NASDAQ:SMCI) to $175 from $165 while keeping an Outperform rating on the company’s shares. According to the analyst, the company’s March quarter guidance shows that Super Micro Computer, Inc. (NASDAQ:SMCI) will continue to generate record margins and free cash flow.
14. Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC)
Net Income (TTM) as of March 17, 2023: $590.81 million
Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) is a mobile phone operator based in Turkey. The company provides mobile communication and digital business services, which includes cyber security, internet of things (IoT), data center, cloud solutions, and managed services. Further, Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) offers home entertainment allowing subscribers to consume TV shows and other related media content.
On March 9, 2023, the company announced its fourth-quarter 2022 results. The company reported a revenue of $846.44 million, exceeding market expectations by $1.29 million. The Normalized EPS for the quarter stood at $0.11, falling short of market estimates by $0.05.
13. Adyen N.V. (OTC:ADYEY)
Net Income (TTM) as of March 17, 2023: $604.07 million
Adyen N.V. (OTC:ADYEY) is a Dutch company that provides payment solutions. The company offers online and in-person payment, risk management, revenue optimization, and financial products. Adyen N.V. (OTC:ADYEY) serves digital businesses, mobility, subscription, retail, platforms, and marketplaces. The company’s clientele comprises Uber Technologies, Inc. (NYSE:UBER), Spotify Technology S.A. (NYSE:SPOT), eBay Inc. (NASDAQ:EBAY), etc.
On January 11, 2023, Lisa Ellis, an analyst at Moffett Nathanson, started covering Adyen N.V. (OTC:ADYEY) with an Outperform rating on the stock. According to the analyst, the company stands out from an investment standpoint because its net revenues, volumes, and net income have increased at compound annual growth rates (CAGR) of 47%, 59%, and 55%, respectively, over the previous past five years.
12. Amadeus IT Group, S.A. (OTC:AMADY)
Net Income (TTM) as of March 17, 2023: $711.75 million
Headquartered in Madrid, Spain, Amadeus IT Group, S.A. (OTC:AMADY) is an information technology company that processes transactions for the tourism and travel industry globally. Its operating segments comprise hospitality and other solutions, air IT solutions, and air distributions. The company offers transaction processing solutions, pricing, booking, real-time-search, ticketing services, etc. In addition, Amadeus IT Group, S.A. (OTC:AMADY) provides a range of technological solutions for automating crucial business processes.
On February 24, 2023, the company reported its fourth quarter 2022 results. The revenue stood at $1.23 billion, missing market estimates by $20.04 million. The Normalized EPS was reported to be $0.41, falling short of market expectations by $0.07.
11. United Airlines Holdings, Inc. (NASDAQ:UAL)
Net Income (TTM) as of March 17, 2023: $737.00 million
United Airlines Holdings, Inc. (NASDAQ:UAL) is an airline holding company that offers passenger and freight air transportation services. The company also provides training and maintenance, ground handling, and catering services for third parties. United Airlines Holdings, Inc. (NASDAQ:UAL) has a fleet of over 800 aircraft.
On March 10, 2023, Brandon Oglenski, an analyst at Barclays, upgraded the rating on United Airlines Holdings, Inc. (NASDAQ:UAL) to Overweight from Equal Weight and increased the price target to $80 from $52. The analyst believes that the robust demands this spring will be advantageous for airlines.
10. Genmab A/S (NASDAQ:GMAB)
Net Income (TTM) as of March 17, 2023: $795.01 million
Genmab A/S (NASDAQ:GMAB) is a Danish biotechnology corporation that specializes in antibody therapeutics for cancer and other diseases. The company has developed tivdak, which is a prescription medicine for adults with cervical cancer. The product pipeline of Genmab A/S (NASDAQ:GMAB) includes Inclacumab for the treatment of vaso-occlusive crises in sickle cell disease, Mim8 for haemophilia A, and Camidanlumab tesirine for relapsed or refractory Hodgkin lymphoma.
On February 23, 2023, Thomas Bowers, an analyst at Danske Bank, upgraded his rating on Genmab A/S (NASDAQ:GMAB) to Buy from Hold with a price target of DKK 3,200.
9. Fortinet, Inc. (NASDAQ:FTNT)
Net Income (TTM) as of March 17, 2023: $857.30 million
Headquartered in California, United States, Fortinet, Inc. (NASDAQ:FTNT) is a software company that offers networking and cybersecurity services. The company provides both hardware and software licenses for various networking and security functions. The company’s product categories include network security, enterprise networking, cloud security, and cybersecurity services.
On February 7, 2023, the company reported its fourth-quarter 2022 results. The company reported a revenue of $1.28 billion, missing wall street estimates by $12.32 million. The Normalized EPS stood at $0.44, surpassing market estimates by $0.05.
8. Carlisle Companies Incorporated (NYSE:CSL)
Net Income (TTM) as of March 17, 2023: $924.00 million
Carlisle Companies Incorporated (NYSE:CSL) is an American manufacturing company that provides transportation products, construction materials, and general industrial products. The company offers single-ply roofing products, building envelope solutions, and high-performance wire and cable. Carlisle Companies Incorporated (NYSE:CSL) also provides solutions for the supply, application, control, and curing of a wide variety of paints, sealants, adhesives, and other application materials. The company operates in four segments, including carlisle construction materials (CCM), carlisle weatherproofing technologies (CWT), carlisle interconnect technologies (CIT), and carlisle fluid technologies (CFT).
On February 7, 2023, the company announced its fourth-quarter 2022 results. The company reported a revenue of $1.45 billion, exceeding market expectations by $10.42 million. The Normalized EPS stood at $3.92, surpassing market estimates by $0.29.
7. Delta Air Lines, Inc. (NYSE:DAL)
Net Income (TTM) as of March 17, 2023: $1.32 billion
Delta Air Lines, Inc. (NYSE:DAL) is an American airline that provides air transportation services for passengers and freight. The company provides maintenance, overhaul, repair, support, aircraft charters, and engineering services. Delta Air Lines, Inc. (NYSE:DAL) has a fleet of more than 900 aircraft.
On January 17, 2023, the company reported its fourth-quarter 2022 results. The company reported a revenue of $12.40 billion, exceeding market expectations by $171.13 million. The Normalized EPS stood at $ 2.46, surpassing market estimates by $0.32.
6. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Net Income (TTM) as of March 17, 2023: $1.32 billion
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a semiconductor company based in the United States. The company offers a variety of products, including graphics, chipsets, video, and multimedia products. Further, Advanced Micro Devices, Inc. (NASDAQ:AMD) provides technological solutions for data center and cloud, gaming, and other industries. Advanced Micro Devices, Inc. (NASDAQ:AMD) has operations in Europe, the Middle East, Africa, Asia Pacific, and the Americas.
On March 1, 2023, Srini Pajjuri, an analyst at Raymond James, commenced coverage of Advanced Micro Devices, Inc. (NASDAQ:AMD) with a price target of $100 and a Strong Buy rating on the company’s shares. According to the analyst, the company is well-positioned for the artificial intelligence and machine learning market based on its combination of GPU, CPU, FPGA, and semi-custom expertise.
5. Arista Networks, Inc. (NYSE:ANET)
Net Income (TTM) as of March 17, 2023: $1.35 billion
Arista Networks, Inc. (NYSE:ANET) is a network equipment company based in the United States. The company develops and sells extensible operating systems, switches, cables, and routers. Moreover, the company provides cloud networking solutions, electronic trading solutions, hybrid cloud solutions, media and entertainment solutions, and security solutions. Arista Networks, Inc. (NYSE:ANET) offers its products and services to cloud service providers, internet companies, entertainment companies, and financial service organizations.
On February 13, 2023, the company announced its fourth-quarter 2022 results. The revenue was reported at $1.28 billion, beating market estimates by $74.53 million. The Normalized EPS stood at $1.41, surpassing market expectations by $0.20.
4. BYD Company Limited (OTC:BYDDF)
Net Income (TTM) as of March 17, 2023: $1.39 billion
Headquartered in Shenzhen, China, BYD Company Limited (OTC:BYDDF) is a conglomerate that manufactures automobile products. The company offers a broad range of battery-electric passenger vehicles and commercial vehicles such as taxis, buses, forklifts, and sanitation vehicles. Other businesses of the company include the production of batteries and electronic products for automobiles and consumer electronics.
3. Daqo New Energy Corp. (NYSE:DQ)
Net Income (TTM) as of March 17, 2023: $1.86 billion
Daqo New Energy Corp. (NYSE:DQ) is a photovoltaics company based in China. The company manufactures and sells polysilicon and silicon wafer. These products are used in ingots, cells, wafers, and modules for solar power solutions. The company’s manufacturing facility in Xinjiang has an annual production capacity of 70,000 metric tons of polysilicon.
On February 28, 2023, the company reported its fourth-quarter 2022 results. The revenue for the quarter stood at $864.25 million, falling short of market expectations by $12.56 million. The Normalized EPS stood at $5.11, missing market estimates by $0.56.
2. Nutrien Ltd. (NYSE:NTR)
Net Income (TTM) as of March 17, 2023: $7.66 billion
Nutrien Ltd. (NYSE:NTR) is a fertilizer company based in Canada. The company engages in the production and distribution of nitrogen, potash, and phosphate products for industrial, agricultural, and feed customers. Additionally, the company offers services to growers directly through a network of farm centers in South America, North America, and Australia.
Joshua Spector, an analyst at UBS, keeps a price target of $103 on Nutrien Ltd. (NYSE:NTR) with a Buy rating on the company’s shares. The analyst believes that the springtime seasonal peak in demand will boost prices and serve as an upside driver.
1. Tesla, Inc. (NASDAQ:TSLA)
Net Income (TTM) as of March 17, 2023: $12.56 billion
Tesla, Inc. (NASDAQ:TSLA), is a multinational Electric Vehicles (EV) manufacturer and clean energy corporation based in the United States. The company is known for its innovative electric vehicle designs and currently offers several car models, including the Model S, Model X, Model 3, Model Y, and Cybertruck. Tesla, Inc. (NASDAQ:TSLA) also engages in the production and sale of energy generation and storage products (from residential to grid-scale), solar roof tiles, and solar panels, as well as offering charging and vehicle accessories, apparel, and lifestyle products.
On January 25, 2023, Tesla, Inc. (NASDAQ:TSLA) announced its fourth-quarter results for the fiscal year 2022. The company reported a revenue of $24.32 billion, beating market estimates by $17.21 million. The Normalized EPS stood at $1.19, exceeding market estimates by $0.08.
Here is what Worm Capital, LLC had to say about Tesla, Inc. (NASDAQ:TSLA) in its 2022 annual investor letter:
Even as rates rose and the macro environment devolved, we believed Tesla, Inc. (NASDAQ:TSLA) was best positioned to grow and thrive, even through a period of extreme uncertainty. They are the market leader in rapidly growing end markets and have spent the past decade growing their competitive advantages and building out physical infrastructure with worldwide reach. While we believe we were right regarding the direction of fundamentals, this was overcome by a vast array of factors we didn’t anticipate that negatively impacted the price.
By and large, Tesla had amazing execution in 2022. They managed to achieve 40% YOY delivery growth. In addition, revenue growth should exceed 50% and profit growth should exceed 120% YOY once Q4 numbers are released. This was accomplished while navigating a myriad of difficulties including a prolonged shutdown at their most productive plant in Shanghai. They scaled two factories on different continents while maintaining industry-leading margins and continued to make advanced progress in transformational technologies that have fast future cash flow potential like AI, software, and manufacturing. Through all the noise a lot of remarkable progress was made… (Click here to read the full text)
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Disclosure: None. 15 Most Profitable Growth Stocks Now is originally published on Insider Monkey.
