Stocks that outperform the market usually share key traits such as rising sales, expanding margins, and increasing returns on capital. The select few that can do all three for many years are often the ones that make you life-changing money.
Long story short, there is a near-perfect correlation between consistent earnings growth and huge winners. Keeping that in mind, here are three market-beating stocks with room for further growth.
Ross Stores (ROST)
Five-Year Return: +72.6%
Selling excess inventory or overstocked items from other retailers, Ross Stores (NASDAQ: ROST) is an off-price concept that sells apparel and other goods at prices much lower than department stores.
Why Are We Positive On ROST?
- Same-store sales growth lends it the confidence to gradually expand its store base so it can reach more customers
- Same-store sales growth averaged 3.6% over the past two years, showing it’s bringing new and repeat shoppers into its stores
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
Ross Stores’s stock price of $228.00 implies a valuation ratio of 30.6x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
First Solar (FSLR)
Five-Year Return: +166%
Headquartered in Arizona, First Solar (NASDAQ: FSLR) specializes in manufacturing solar panels and providing photovoltaic solar energy solutions.
Why Is FSLR a Good Business?
- Impressive 23.3% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Free cash flow profile has moved into positive territory over the last five years, indicating the company has passed a significant test
- Rising returns on capital show management is finding more attractive investment opportunities
At $201.88 per share, First Solar trades at 9.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Cactus (WHD)
Five-Year Return: +77.8%
Named for the spiky wellhead equipment that reminded founders of desert cacti, Cactus (NYSE: WHD) manufactures wellheads, valves, and spoolable pipes used in drilling and producing oil and gas wells.
Why Do We Love WHD?
- Impressive 24.1% annual revenue growth over the last nine years indicates it’s winning market share this cycle
- EBITDA profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- WHD is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Cactus is trading at $55.72 per share, or 19.2x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week - FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
