Many corporations have reported earnings over the past few weeks. The steady stream of earnings reports gives investors a better idea of how to value companies and what to expect from them moving forward.
Some growth stocks continued to excel, posting rising revenue and profit margins. However, other growth stocks demonstrated possible challenges along the horizon. Those corporations often posted decelerating year-over-year (YOY) revenue and net income growth.
Buying and holding reliable corporations allows investors to realize returns and save a lot of time. You don’t have to time the market or trade options during the earnings season to achieve long-term financial goals. It’s possible to accumulate shares in solid companies and watch your money grow over time.
Some growth stocks do a better job at growing investors’ money than others, and earnings reports offer clues on which stocks are the winners. Investors may want to monitor these promising growth stocks after they delivered impressive earnings results.
Meta Platforms (META)
Few stocks have delivered the same financial growth as Meta Platforms (NASDAQ:META) while trading at a 26 P/E ratio. Revenue jumped by 22% YOY while net income soared by 73% YOY in the second quarter. Meta Platforms knows how to attract and retain users. The company has 3.27 billion daily active users spread across its social networks. That figure is up by 7% YOY.
Meta Platforms has outperformed the stock market for several years. Shares are up by 49% year-to-date (YTD) and have rallied by 181% over the past five years. The social media giant continues to return capital to shareholders. Investors received $1.27 billion worth of dividends in the quarter. Meta Platforms also invested $6.32 billion into stock buybacks.
The online advertiser has established itself as one of the top choices for businesses. Its targeting capabilities are hard to match, and Meta Platforms continues to retain attention across multiple platforms.
Sezzle (SEZL)
The “Buy Now Pay Later” fintech firm is one of the top-performing stocks right now. Sezzle (NASDAQ:SEZL) is up by an astonishing 490% YTD and has a $678 million market cap. The hidden gem should extend its gains due to a very promising earnings report.
Sezzle delivered 60% YOY revenue growth to reach $56 million. Furthermore, net income surged to reach $29.7 million. The company aggressively increased its guidance, now projecting 35%-40% YOY revenue growth instead of 25% YOY revenue growth. Net income is also projected to reach $55.0 million instead of the previous guidance of $30 million.
The net income goal is important for understanding the growth opportunity that Sezzle provides. Assuming Sezzle reaches this goal, it’s trading at a forward P/E ratio of approximately 12. This valuation comes form a company that anticipates full-year revenue growth to by as high as 40%. It’s also possible for Sezzle to raise its guidance again in the third quarter.
Deckers Outdoor (DECK)
Deckers Outdoor (NYSE:DECK) is an athletic apparel company that is gaining market share from its more established rivals. The company has several brands under its umbrella, with HOKA and UGG being the most important ones.
The company started fiscal 2025 on a high note with 22% YOY revenue growth. The company’s $825 million revenue came alongside $116 million in net income. That figure is up by 82% YOY, and brought Deckers Outdoor’s net profit margin to 14%. Shares are up by 36% YTD and trade at a 29 P/E ratio. Also, the stock is up by 584% over the past five years!
HOKA was a key contributor for total sales. That part of Deckers Outdoor’s business grew by 29.7% YOY and brought in $545.2 million in the quarter. That’s more than half of the company’s total revenue. Deckers Outdoor closed out the quarter with a $1.438 billion cash position and had no outstanding borrowings.
American Express (AXP)
American Express (NYSE:AXP) offers growth at a reasonable price. The stock trades at an 18 P/E ratio and offers a 1.18% yield while delivering 9% YOY revenue growth in the second quarter. Furthermore, net income jumped by 39% YOY, putting more emphasis on the low P/E ratio.
Shares of the credit and debit card issuer have outperformed the S&P 500 with a 26% YTD gain. And, the stock is up by 90% over the past five years. American Express’ rising profit margins can help it command a valuation similar to its peers in the future. That development could help American Express stock gain more than 50%, but it can take a while before investors see it in the same light as Visa (NYSE:V) and Mastercard (NYSE:MA). For now, American Express continues to expand its margins and closed out the second quarter with a net profit margin of 20%.
Intuit (INTU)
Intuit (NASDAQ:INTU) offers financial and business software that helps people with several tasks, such as filing taxes, organizing their finances and growing their companies. Those software products result in recurring revenue that has helped the company outperform the stock market for several years. While shares are only up by 4% YTD, they have rallied by 132% over the past five years. Also, Intuit has a 0.57% yield and has maintained a high dividend growth rate for several years.
The fintech firm delivered 12% YOY revenue growth in the third quarter of fiscal 2024. The company’s $6.7 billion in revenue prompted it to raise guidance for fiscal 2024. Notably, Credit Karma posted an 8% YOY revenue growth rate after having a negative growth rate for several quarters. Consumer Group revenue and Small Business and Self-Employed Group revenue increased by 9% YOY and 18% YOY, respectively. TurboTax Live revenue grew by 17% YOY and represented more than one-third of Consumer Group revenue.
Chipotle (CMG)
Chipotle (NYSE:CMG) has been outperforming the stock market for a while. It’s gains resemble a tech company, as shares are up by 24% year-to-date and have surged by 2442% over the past five years. The corporation recently completed a 50-for-1 stock split which has made shares more accessible to options traders. That development should increase Chipotle’s volatility and potential gains.
The fast food restaurant chain reported 18.2% YOY revenue growth in the second quarter and remains on track to open 285-315 restaurants this year. Chipotle opened 52 company-operated restaurants and an international licensed restaurant during the quarter. Net income increased by 33.3% YOY.
While these results are good in most quarters, they’re even better in this quarter. Several fast food restaurants have reported slower sales as consumers pull back on purchases. Chipotle’s revenue growth during this economic environment is a strong testament to its pricing power and status as a healthier fast food restaurant chain than average.
Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is the leading online advertiser. It offers top-tier targeting capabilities across several channels, such as Google, YouTube and websites that enable Google Adsense. The tech giant has rallied by 17% YTD and has surged by 178% over the past five years. The stock trades at a 24 P/E ratio and has a 0.49% yield.
Google’s parent company delivered 14% YOY revenue growth in the second quarter while net income increased by 29% YOY. Alphabet closed out the quarter with a 27.9% net profit margin.
Artificial intelligence is helping the stock, but its valuation offers a good margin of safety. Investors can see the impact of AI within the company’s rising Google Cloud revenue. More than 10% of Alphabet’s total revenue came from Google Cloud, and its revenue growth outpaced advertising growth. Alphabet is the third largest cloud provider and looks poised to gain market share in the upcoming quarters.
On this date of publication, Marc Guberti held long positions in SEZL, DECK, and GOOG. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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