Buying and holding an index can eventually double your money, but its smarter to look for stocks predicted to double. That’s because you can grow your money faster with the right investments. Some stocks double within a few years, while others do it in a few months.
It’s very difficult to pinpoint stocks that will double within a few months. Shorter timeframes require a good mix of financial results, timing, and luck. However, luck becomes less relevant if you expand the time horizon.
Investors will have an easier time finding stocks that double if they set the deadline to 2026 instead of the end of 2024. Corporations then have more time to capitalize on growth initiatives, report stronger financials, and gain market share.
Finding stocks in high-growth industries with rising revenue and profit margins is a good recipe for success. These are some of the top growth stocks predicted to double by the end of 2026.
CommVault Systems (CVLT)
CommVault Systems (NASDAQ:CVLT) is a cloud security company offering a centralized platform. This model makes it easier for businesses to detect and address threats before they become serious.
Revenue continues to rise for the cybersecurity firm. Q4 FY24 sales grew by 10% year-over-year to reach $223.3 million, while subscription revenue was up even more. That segment jumped by 27% YOY to reach $119.9 million.
CommVault Systems initiated a $50.4 million stock buyback in the quarter. A one-time $103 million windfall from an income tax benefit gave the company extra cash to put back into its stock. CommVault Systems reported $23.1 million in income, excluding the income tax benefit.
Growth should continue for the firm. Guidance for the next quarter implies 8.3% year-over-year revenue growth at the midpoint. CommVault Systems also has $770 million in total annual recurring revenue, which is up by 16% year-over-year. That’s not the only thing going up for CommVault Systems. Shares are up by 48% year-to-date and have gained 140% over the past five years.
Sezzle (SEZL)
Sezzle (NASDAQ:SEZL) is a fintech firm that specializes in “Buy Now, Pay Later” solutions. The stock has silently crushed the stock market with a 306% year-to-date gain. Despite the incredible rally, the stock only trades at a 38 P/E ratio.
Revenue, denoted as “Total Income” in the Q1 2024 press release, increased by 35.5% year-over-year. Net income jumped by 364.3% YOY, resulting in a 17.0% net profit margin. The company’s Q1 FY24 GAAP net income exceeded all of its fiscal 2023 GAAP profits.
Sezzle has $82.2 million of cash on hand and a market cap of roughly $500 million. The firm bumped its guidance to suggest 25% YOY revenue growth and $30 million in GAAP net income in fiscal 2024. Sezzle has a solid balance sheet with more than twice as many current assets as current liabilities.
Sezzle plans to generate $5 EPS in fiscal 2024. Current levels indicate the stock has a forward P/E ratio under 18 times.
Texas Roadhouse (TXRH)
Many fast-food restaurant stocks have been soaring. Chipotle (NYSE:CMG) set the standard of how quickly a fast-food restaurant chain can grow. It’s easy to see Chipotle’s 5-year gain of 351% and wonder if you can find the next hot restaurant stock.
Granted, many investors have had this same idea. Money has poured into fast-food restaurant stocks, inflating their P/E ratios and making them far riskier than they were a few months ago.
Texas Roadhouse (NASDAQ:TXRH) is an exception to the rule that offers “growth at a reasonable price.” The stock trades at a 34 P/E ratio and offers a 1.45% yield. Shares are up 41% year-to-date and have more than tripled over the past five years.
The steakhouse restaurant chain reported another quarter with rising revenue and profit margins. Sales increased by 12.5% YOY in the first quarter, while net income was up by 31% YOY. Comparable restaurant sales flourished and were up by 8.4% year-over-year. Rising profit margins, more restaurant openings, and a reasonable valuation make the stock a good candidate for a doubling by the end of 2026.
On this date of publication, Marc Guberti held long positions in CVLT and TXRH. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
