The new bull market has arrived, and now is the best time to find the next monster growth stocks.
When the market crashed during the 2008 recession, many investors panicked and kept their money on the sidelines. That was a big mistake, as they missed out on the longest bull market in history.
Investing in individual stocks is not for the faint of heart. However, growth stocks can put investors on a path to early retirement.
With year-end approaching, these three monster stocks could outperform the market through 2024 and beyond.
Below are my top three most promising growth stocks to buy right now!
Shopify (SHOP)
Shopify (NYSE:SHOP) is a Canadian multi-national technology and e-commerce company headquartered in Ottawa, Canada. The company operates as a primary point-of-sale for e-commerce companies. Shopify’s stock has risen 72% year-to-date (YTD), driven by a broad recovery in technology stocks.
Last year was rough for technology companies, especially Shopify. The company saw strong top-line growth but had lost a ton of money. For FY 2022, Shopify’s operating loss was $822.3 million, compared to operating income of $268.6 million in the year prior. However, its most recent Q3 fiscal 2023 highlights show gross margins and free cash flow (FCF) are trending in the right direction.
In Q3 2023, revenue rose 25% year-over-year to $1.7 billion. Gross merchandise volume (GMV) grew 22% to $56.2 billion, an increase of $10 billion year-over-year (YOY). Furthermore, Shopify’s gross margins hit 52.6% as a result of the sale of its logistics business to Flexport. The company’s cost-cutting strategy in 2023 has been working, as operating income swung from negative to positive.
FCF was 16% of sales for the quarter and is expected to remain in the high teens in Q4 2023. Shopify’s liquidity is strong. In fact, its net cash position hit $4 billion. Investors might be undervaluing Shopify’s long-term FCF potential, which could be the turning point for the company. With global e-commerce sales accelerating, Shopify is one of the best monster growth stocks for 2024.
Mastercard (MA)
Mastercard (NYSE:MA) has been quietly providing investors with market-beating returns over the last five years. When you think of exciting growth stocks to buy, Mastercard is not the first company that comes to mind. But over the last 5 years, Mastercard has risen 98%, compared to the S&P 500’s 61%.
Because the macroeconomic environment shifted in 2022, credit card processors continue to benefit from higher interest rates. Inflation has also been crushing the average consumer as the cost of living continues to rise. Additionally, the U.S. personal savings rate has fallen precipitously from more than 32% in 2020 to just 3.4% now. Despite more unfavorable circumstances, consumers continue to take on more credit card debt, hitting a record $1 trillion in August 2023.
In Q3 2023, Mastercard’s revenue rose 14% year-over-year to $6.5 billion. Cross-border volume was up 21% on a local currency basis. Net income was $3.2 billion for the quarter — or $3.39 per share. Mastercard continues to capitalize on higher interest rates, which might remain higher for longer.
Through the quarter ended September 2023, Mastercard repurchased 19.2 million shares and returned $1.6 billion in dividends to shareholders. Analysts project FY 2023 EPS in the $12.16 to $12.23 range, representing 19% YOY growth. As interest rates remain elevated, investors should snap up shares before the end of 2023.
Netflix (NFLX)
Netflix (NASDAQ:NFLX) shares plunged in the first half of 2022 due to weakening subscriber growth and quarterly losses. The company was up against inflation, higher interest rates and a weakening advertising market. Netflix executives also began cracking down on password sharing, which was hurting the company’s subscriber growth and bottom line.
For FY 2022, revenue grew 6% YOY to $31.6 billion. That’s small compared to its 19% revenue growth in 2021. Ongoing macroeconomic headwinds impacted revenue growth as consumers cut back on their subscription services going into 2022. However, Netflix has been cracking down on password sharing, boosting subscriber growth in Q3 2023.
During the third quarter ended September 30, Netflix added 8.76 million global subscribers. That was well above Wall Street’s estimate of 5.49 million subscribers. Netflix also raised its prices for both its basic and premium plans, driving profitable growth. Its new ad-plan membership model is gaining traction, growing 70% quarter over quarter.
Netflix expects robust FCF growth for FY 2023. The company increased its FY23 FCF forecast to $6.5 billion, up from the previous forecast of $5 billion. That is more than 4X its FCF for FY22. As it expands its reach globally, Netflix is among the best monster growth stocks to consider for 2024.
On the date of publication, Terel Miles did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
