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.
The risks that can come from buying these assets is precisely why we started StockStory – to isolate the long-term winners from the losers so you can invest with confidence. On that note, here are three growth stocks with significant upside potential.
One-Year Revenue Growth: +26.7%
With its colorful interface of boards, columns, and automation that replaced the chaos of spreadsheets, monday.com (NASDAQ:MNDY) is a cloud-based work operating system that helps teams manage projects, track tasks, and streamline workflows through customizable interfaces.
Why Is MNDY a Good Business?
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ARR growth averaged 26.9% over the last year, showing customers are willing to take multi-year bets on its software
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Superior software functionality and low servicing costs are reflected in its best-in-class gross margin of 89.2%
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Software platform has product-market fit given the rapid recovery of its customer acquisition costs
monday.com’s stock price of $62.45 implies a valuation ratio of 2.4x forward price-to-sales. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
One-Year Revenue Growth: +25.2%
One of two remaining major hard drive manufacturers after decades of industry consolidation, Seagate (NASDAQ:STX) manufactures hard disk drives and solid state drives that store data in data centers, cloud systems, and consumer devices.
Why Are We Fans of STX?
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Impressive 24.7% annual revenue growth over the last two years indicates it’s winning market share this cycle
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Estimated revenue growth of 28.7% for the next 12 months implies demand will accelerate from its two-year trend
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Operating margin increased by 8 percentage points over the last five years as it refined its cost structure
At $501.95 per share, Seagate trades at 29.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
One-Year Revenue Growth: +56.4%
Formerly known as Apollo Medical Holdings until early 2024, Astrana Health (NASDAQ:ASTH) operates a technology-powered healthcare platform that enables physicians to deliver coordinated care while successfully participating in value-based payment models.
Why Does ASTH Stand Out?
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Annual revenue growth of 51.5% over the last two years was superb and indicates its market share increased during this cycle
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Revenue outlook for the upcoming 12 months is outstanding and shows it’s on track to gain market share
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Earnings per share grew by 15.9% annually over the last five years and trumped its peers
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