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:
Arista Networks (ANET) – Arista Networks provides cloud networking solutions, offering high-performance switches and software for data centers, AI workloads, and enterprise environments. ANET stock’s average price target of $165.13 implies a 16.16% upside potential from the current level. The company’s revenue has grown at a five-year CAGR of about 25%.
Importantly, TipRanks AI Analyst expects ANET’s revenue to grow at 26%, which is much above the Technology sector’s average of 8.5%. The company is gaining from strong demand for AI, cloud, and business tools.
MercadoLibre (MELI) – MercadoLibre is an e-commerce and fintech platform. MELI stock’s average price target of $2,893.62 implies an upside potential of 21.06%. Its revenue increased at a CAGR of 39.2% in the past five years.
According to TipRanks AI Analyst, MELI’s revenue is expected to grow at 38.3% in comparison to the Consumer Cyclical sector’s average of 1.52%. The company’s successful penetration in the digital payments sector and rising advertising revenue aid in top-line growth.
Snowflake (SNOW) – This cloud-based data platform provides data warehousing, analytics, and sharing solutions for businesses. SNOW stock has a price forecast of $265.88, which implies a 23.12% upside potential. The company’s revenues have witnessed a five-year CAGR of 43.7%.
The company’s revenue is expected to rise by 28.37%, according to TipRanks AI Analyst. This compares favorably with the Technology sector’s average of 8.5%. Snowflake’s revenue is rising thanks to strong demand, AI-driven product upgrades, and strategic cloud partnerships that helped expand its reach.
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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