2 Monster Growth Stocks to Buy in 2024 Before They Skyrocket Higher

The market rally that began in 2023 is still showing signs of survival in 2024, and investors’ hopes for a prolonged bull market are clearly evident in various sectors. For long-term investors, these short-term market ups and downs aren’t necessarily fun, but they also don’t have much of an impact on long-term plans.

Long-term investors don’t really care about market timing. Even if stock buyers are lucky and buy at just the right time to generate fantastic returns from time to time, those buyers will soon discover that such performance is difficult to replicate often enough to sustain that level of returns in any meaningful way. Long-term investors know that the better option is to focus on diversifying their portfolio and continually adding positions in great companies regardless of stock market conditions.

If you’re looking for a great company that’s also a potential monster growth stock worth buying and holding for the long term, here are two names to consider.

1. Duolingo

Duolingo (near 1.38%) An educational technology company that creates learning apps and provides language certifications. The tech company offers courses in music, math, and more than 40 languages. It has grown to become the world’s leading language learning app by revenue.

The company’s success is recognized by the market, with its share price soaring 60% in the past 12 months. Part of the enthusiasm is the fact that the overall market for language learning is expected to grow to approximately $188 billion by the early 2030s. This is a significant expansion compared to the current market size of approximately $71 billion.

Duolingo is building services beyond language learning to expand its presence in the broader education technology space. Maths and music courses were only added to the app’s offerings in late 2023, with more subjects likely to be added in the future.

Another reason the market is excited is the fact that Duolingo’s financials are steadily improving and the company is profitable under generally accepted accounting principles (GAAP). Users can access Duolingo’s educational services by subscribing or using the ad-supported free tier.

In 2023, Duolingo generated $531 million in revenue, $496 million of which came from subscription bookings. These two figures represent an increase of 44% and 49% respectively from 2022. Total bookings on the Duolingo platform in 2023 will exceed $622 million, an increase of 45% year-on-year.

Net income for 2023 was $16 million, a significant improvement over 2022’s net loss of approximately $60 million. Free cash flow in 2023 totaled $144 million, a whopping 213% increase over 2022. Duolingo currently has 26.9 million daily active users and 88.4 million monthly active users. These two figures are an increase of 65% and 46%, respectively, compared to the same period last year.

Some Wall Street analysts believe the stock could have an average upside of 21% and as high as 31% over the next 12 months alone.

If you step back and look at the bigger picture, this is a business that has tremendous growth opportunity in a vast and rapidly expanding market, and is an increasingly profitable business at that. This could present an attractive buying opportunity for some long-term investors.

2. Intuitive surgery

intuitive surgery (ISRG 1.04%) We are a leader in the field of surgical robots. Some analysts estimate the sector could be worth about $20 billion by 2030. There is growing demand for the precision and improved patient outcomes that surgical robotic systems can provide. Intuitive’s products and services are suitable for minimally invasive surgery and are also finding use cases in open surgery. Intuitive Surgical inherently benefits from the overall growth trajectory of its dominant industry. Our unique business model drives consistent revenue growth and profitability.

When hospitals and other health systems purchase a suite of surgical robots, they are making a significant investment. Intuitive Surgical’s systems cost between $700,000 and $2.5 million. Customers can purchase these systems directly through leases or, in some cases, consumption-based contracts.

Each system requires specific instruments and accessories, which must be replaced after a certain number of uses. The company typically earns $700 to $3,600 for every procedure performed using one of its systems through sales of the necessary equipment and accessories.

Intuitive Surgical also typically enters into service agreements with customers when they lease or purchase a system. These contracts have annual rates per family ranging from as low as $80,000 to as high as $200,000 per system.

This is a variation of the razor and blade sales model where most of the revenue comes from razor blade sales. Intuitive Surgical reported full-year 2023 sales of $7.1 billion, up approximately 15% from 2022. Of this, $5.94 billion was generated from recurring revenue (e.g. blades), which represents 83% of Intuitive Surgical’s 2023 revenue.

The company’s recurring revenue as a percentage of overall revenue has steadily increased over time. In 2022, 79% of Intuitive Surgical’s annual revenue came from recurring revenue, compared to 75% in 2021. And in 2023, Intuitive Surgical reported revenue of $1.8 billion, up 35% from the previous year. Over the past 12 months, the company generated $780 million in free cash flow.

This is a solid business, and while it won’t necessarily make you rich overnight (as some stocks can), it’s one of those types of things that can bring you steady returns over time. Investors appear to have experienced renewed interest in the stock alongside the rise in the broader market, with the stock up around 50% in the last 12 months. This could be a good time for long-term investors to take another look at these top healthcare stocks.