Growth boosts valuation multiples, but it doesn’t always last forever. Companies that cannot maintain it are often penalized with large declines in market value, a lesson ingrained in investors who lost money in tech stocks during 2022.
Luckily for you, our job at StockStory is to help you avoid short-term fads by pointing you toward high-quality businesses that can generate sustainable long-term growth. On that note, here are three growth stocks where the best is yet to come.
Impinj (PI)
1-Year Revenue Growth: +19%
Founded by Caltech professor Carver Mead and one of his students Chris Diorio, Impinj (NASDAQ:PI) is a maker of radio-frequency identification (RFID) hardware and software.
Why Are We Positive On PI?
- Annual revenue growth of 19.2% over the past two years was outstanding, reflecting market share gains this cycle
- Incremental sales over the last five years have been highly profitable as its earnings per share increased by 125% annually, topping its revenue gains
- Free cash flow margin increased by 44.7 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Impinj’s stock price of $91 implies a valuation ratio of 32.4x forward price-to-earnings. Is now a good time to buy? Find out in our full research report, it’s free.
Parsons (PSN)
1-Year Revenue Growth: +24%
Delivering aerospace technology during the Cold War-era, Parsons (NYSE:PSN) offers engineering, construction, and cybersecurity solutions for the infrastructure and defense sectors.
Why Do We Like PSN?
- Annual revenue growth of 26.8% over the past two years was outstanding, reflecting market share gains this cycle
- Share buybacks catapulted its annual earnings per share growth to 34.5%, which outperformed its revenue gains over the last two years
- Historical investments are beginning to pay off as its returns on capital are growing
Parsons is trading at $58.01 per share, or 14.5x forward price-to-earnings. Is now the right time to buy? See for yourself in our full research report, it’s free.
IonQ (IONQ)
1-Year Revenue Growth: +95.4%
Born from groundbreaking research at the University of Maryland and Duke University, IonQ (NYSE:IONQ) develops quantum computers that process information using trapped ions to solve complex problems beyond the capabilities of traditional computers.
Why Are We Fans of IONQ?
- Annual revenue growth of 96.7% over the last two years was superb and indicates its market share increased during this cycle
- Market share is on track to rise over the next 12 months as its 98.5% projected revenue growth implies demand will accelerate from its two-year trend
- Adjusted operating profits increased over the last four years as the company gained some leverage on its fixed costs and became more efficient
At $23.09 per share, IonQ trades at 56.9x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
Put yourself in the driver’s seat by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free.