2 growth stocks that could soar in 2024
There is more room for these stocks to bounce back from here.
Investors have already seen the stock rise significantly in 2024. Of course, the following companies have been winners in the popular field of artificial intelligence (AI): nvidia and meta platform Posts excellent annual returns. But there are also some top stock performers that might surprise you. Chipotle For example, it’s one of the top 10 companies with the biggest gains so far this year.
The fast food giant’s rise shows how exceptional returns can be achieved in any industry, often surrounded by mediocre performance among its peers. So let’s take a look at some standout growth stocks that are poised for big gains this year.
1. Moving toward growth
garmin (GRMN 0.56%) The stock is already outperforming the market so far in 2024, but there is room for further growth. The navigation technology specialist announced excellent sales results across its diverse product portfolio in early May. Sales increased 40% in the fitness wearables segment and improved 11% in the smartwatch segment. Many consumer technology giants, e.g. apologize) had difficulty increasing profits.
Garmin isn’t having trouble benefiting from growth, either. Gross margin increased from 57% of revenue to 58% of revenue. Operating profit soared from 17% of sales in the same period last year to 22% of sales, resulting in an increase of almost 40% in operating profit. “We attribute these notable results to our strong product portfolio and the strong demand trends we have been experiencing,” CEO Cliff Pemble said in his press release.
Most Wall Street experts expect revenue to rise 12% this year, but Garmin could beat those expectations with a strong holiday season performance. In any case, shareholder returns are expected to be solid as the company continues to gain market share while growing its profit margins above 20% on sales.
2. Amazing returns
Amazon‘S (AMZN 0.58%) Despite our already huge sales volume, we can continue to expand our business here. The e-commerce giant saw its most recent sales increase 13%, bringing first-quarter sales to a healthy $143 billion. This growth has been driven primarily by a surge in the services sector. Amazon Web Services revenue grew 17%, and AWS now generates $100 billion in annual revenue, driven by surging demand for AI-based cloud services.
Amazon has a great opportunity to expand its Software-as-a-Service (SaaS) platform in the coming years as more companies modernize their technology infrastructure. The e-commerce sector offers solid economics thanks to Amazon’s massive scale. Add in the Prime subscription service, streaming video, and digital advertising, and there’s no shortage of areas for growth. “Our entire business is still in the early stages,” CEO Andy Jassy told investors in late April.
The better news for investors is that Amazon has finally achieved a significant financial win through growth. Free cash flow last year was $50 billion, up from $3 billion outflow the previous year. Last quarter, profits more than tripled to $10 billion.
The stock valuation is still attractive. The stock is currently priced at 3.4 times sales, or about twice the low investors saw in early 2023. However, this still translates to a discount from P/S ratios above 4 until later stages of the pandemic. Amazon should deliver strong returns to long-term investors at that price beyond 2024.
Randi Zuckerberg, a former director of market development, Facebook spokesperson 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 works at Amazon, Apple, Chipotle Mexican Grill, and Meta Platforms. The Motley Fool holds positions in and recommends Amazon, Apple, Chipotle Mexican Grill, Garmin, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.
