Growth stocks represent companies poised for rapid expansion, beating both the overall market and industry peers. This growth potential translates to large capital appreciation for investors. Also, investing in growth stocks can be a long-term strategy, as these companies reinvest profits to drive future expansion.
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One way to identify these stocks is through their past revenue or earnings growth. Today, we have shortlisted stocks whose revenue has grown at a five-year CAGR of more than 10%. Along with this parameter, we have zeroed in on stocks that have received Strong Buy ratings from Wall Street analysts.
Here are this week’s stocks:
Spotify (SPOT) – This digital music streaming platform allows users to listen to millions of songs, podcasts, and playlists worldwide. SPOT stock’s average price target of $792.67 implies a 22.13% upside potential from the current level. The company’s revenue has grown at a five-year CAGR of about 15%.
Importantly, TipRanks AI Analyst expects SPOT’s revenue to grow by 15.52%, compared with the Communication Services sector’s average of 2.83%. Spotify’s revenue growth has been driven by rising premium subscriptions, expanding podcast ad sales, and global user growth.
Mastercard (MA) – This global financial services company is focused on digital payments and card-based transaction processing. MA stock’s average price target of $675.66 implies an upside potential of 23.96%. Its revenue increased at a CAGR of 12.98% in the past five years.
According to TipRanks AI Analyst, Mastercard’s revenue is expected to grow by 15.67% in comparison to the Financial sector’s average of 9.73%. The company’s revenue growth is driven by rising cross-border volumes and the expansion of high-margin value-added services.
AutoZone (AZO) – AutoZone is a retailer and distributor of automotive replacement parts and accessories in the United States. AZO stock’s average price target of $4,645.53 implies an upside potential of 31.36%. The company’s revenue has grown at a five-year CAGR of 11.7%.
The company’s revenue is expected to rise by 2.43%, according to TipRanks AI Analyst. This compares favorably with the Consumer Cyclical sector’s average of 1.52%. Strong DIY and commercial demand, new store openings, and investments in mega-hubs and supply chain efficiency are key factors driving AZO’s top-line growth.
What Is TipRanks’ Smart Growth Newsletter?
TipRanks’ Smart Growth Newsletter provides top growth investment ideas on a weekly basis, based on TipRanks’ data and analysis. The newsletter includes macroeconomic, market-wide, and company-specific analysis to help investors understand the trends that may influence their growth investments.
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