Investors have already seen strong stock price gains in 2024. Several winners are of course in the popular area of artificial intelligence (AI), with companies like Nvidia And Metaplatforms posting excellent returns since the start of the year. But there are also a few top-performing stocks that might surprise you. Chipotle is one of the 10 biggest gainers so far this year, for example.
The fast food giant’s growth illustrates how excellent returns can be achieved in any industry and are often surrounded by mediocre performance among its peers. So let’s take a look at some standout growth stocks that look poised for big gains this year.
1. Navigate towards growth
Garmin (NYSE:GRMN) The stock is already beating the market so far in 2024, but there is still room for additional growth to come. The navigation technology specialist announced exceptional sales results across its diverse product portfolio in early May. Revenue jumped 40% in its fitness wearables segment and improved 11% in its smartwatch division. Sales were up 20% overall, even though many consumer tech giants (like Apple) has struggled to increase revenue.
Garmin is also not struggling to benefit from its growth. Gross profitability amounts to 58% of turnover compared to 57% of turnover. Operating profit jumped to 22% of sales, up from 17% of sales a year earlier, helping profits rise nearly 40%. “We attribute these remarkable results to our strong product portfolio and the robust demand trends we are experiencing,” CEO Cliff Pemble said in a press release.
Most Wall Street professionals expect revenue to increase 12% this year, but Garmin could beat those forecasts thanks to strong performance during the holiday season. Either way, shareholder returns should be strong as the company continues to gain market share while increasing profit margins above 20% of sales.
2. Amazing returns
AmazonIt is (NASDAQ:AMZN) the company can still grow from here despite its already massive business footprint. The e-commerce giant recently reported a 13% increase in sales, bringing its first-quarter revenue to $143 billion. This growth is mainly due to the growth of the services sector. Its sales of Amazon Web Services jumped 17%, and AWS is now operating at an annual run rate of $100 billion thanks to growing demand for AI-driven cloud services.
Amazon has a good chance of expanding its software as a service platform over the coming years as more companies modernize their technology infrastructures. The e-commerce segment offers strong economics thanks to Amazon’s massive size. Add in the Prime subscription service, video streaming and digital advertising, and there is no shortage of areas for growth. “All of our businesses are in their early stages,” CEO Andy Jassy told investors in late April.
The best news for investors is that Amazon is finally allowing its growth to translate into meaningful financial gains. Free cash flow over the past year was $50 billion, compared to an outflow of $3 billion a year earlier. Profit more than tripled last quarter to $10 billion.
The stock’s valuation also remains attractive. Shares are valued at 3.4 times current sales, about double the lowest investors saw in early 2023. However, this still translates into a discount to the P/S ratio of more than 4 until the final stages of the pandemic. Amazon should provide strong returns for long-term investors at this price in 2024 and beyond.
Should you invest $1,000 in Garmin right now?
Before buying Garmin stock, consider this:
THE Motley Fool Stock Advisor The analyst team has just identified what they think is the 10 best stocks for investors to buy now…and Garmin wasn’t one of them. The 10 selected stocks could produce monster returns in the years to come.
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Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Demitri Kalogeropoulos holds positions in Amazon, Apple, Chipotle Mexican Grill and Meta Platforms. The Motley Fool holds positions and recommends Amazon, Apple, Chipotle Mexican Grill, Garmin, Meta Platforms and Nvidia. The Motley Fool has a disclosure policy.
2 Growth Stocks That Could Skyrocket in 2024 was originally published by The Motley Fool
