Companies that consistently increase their sales, margins, or returns on capital are usually rewarded with the best returns, and those that can do all three for years on end are almost always the legendary stocks that return 100 times your money.
The bottom line is that over the long term, earnings growth goes hand in hand with the biggest winners. Taking that into account, here are three market-beating stocks with room for further growth.
Dutch Bros (BROS)
Return Since IPO: +32.9%
Started in 1992 by two brothers as a single pushcart, Dutch Bros (NYSE: BROS) is a dynamic coffee chain that’s captured the hearts of coffee enthusiasts across the United States.
Why Do We Watch BROS?
- Fast expansion of new restaurants to reach markets with few or no locations is justified by its same-store sales growth
- Average same-store sales growth of 4.3% over the past two years indicates its restaurants are resonating with diners
- Operating margin expanded by 3.5 percentage points over the last year as it scaled and became more efficient
Dutch Bros’s stock price of $48.75 implies a valuation ratio of 97x forward price-to-earnings. Is now a good time to buy? Find out in our full research report, it’s free.
Reddit (RDDT)
Return Since IPO: +64.3%
Founded in 2005 by two University of Virginia roommates, Reddit (NYSE: RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.
Why Are We Bullish on RDDT?
- Domestic Daily Active Visitors are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Earnings per share have massively outperformed its peers over the last two years, increasing by 80.4% annually
- Free cash flow margin expanded by 43.9 percentage points over the last few years, providing additional flexibility for investments and share buybacks/dividends
Reddit is trading at $82.86 per share, or 33.4x forward EV-to-EBITDA. Is now the right time to buy? See for yourself in our full research report, it’s free.
Lantheus (LNTH)
Five-Year Return: +675%
Pioneering the "Find, Fight and Follow" approach to disease management, Lantheus Holdings (NASDAQGM:LNTH) develops and commercializes radiopharmaceuticals and other imaging agents that help healthcare professionals detect, diagnose, and treat diseases.
Why Do We Like LNTH?
- Impressive 34.6% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Free cash flow margin grew by 31 percentage points over the last five years, giving the company more chips to play with
- Returns on capital are climbing as management makes more lucrative bets
At $89.20 per share, Lantheus trades at 13.2x forward price-to-earnings. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.
