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2 growth stocks that could skyrocket in 2024

Investors have already seen some big price increases in 2024. Several winners are of course in the popular artificial intelligence (AI), with companies like Nvidia And Metaplatforms achieve excellent returns throughout the year. But there are also a few top performers who might surprise you. Chipotle for example, is one of the ten biggest winners so far this year.

The fast food giant’s growth illustrates how excellent returns can be found in every sector and are often accompanied by mediocre performance from peers. So let’s take a look at a few standout growth stocks that appear 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 room for more growth in the future. The navigation technology specialist announced excellent sales results for its diverse product portfolio in early May. Sales increased by 40% in the fitness wearables segment and improved by 11% in the smartwatch division. Sales rose a healthy 20% overall, as did many consumer tech giants (e.g Apple) struggled to increase sales.

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Garmin also has no problems taking advantage of the growth. Gross profitability increased from 57% to 58% of turnover. Operating profit rose from 17% a year earlier to a staggering 22% of sales, boosting profits by almost 40%. “We attribute these remarkable results to our strong product portfolio and the robust demand trends we have experienced,” CEO Cliff Pemble said in a press release.

Most Wall Street pros see revenue up 12% this year, but Garmin could exceed those expectations with strong performance this holiday season. Either way, shareholder returns are likely to be solid as the company continues to gain market share and profit margins can rise above 20% of sales.

2. Great returns

Amazon‘S (NASDAQ: AMZN) The company can still expand from here, despite its already huge sales footprint. The e-commerce giant recently posted a 13% increase in sales, boosting first-quarter revenue to a healthy $143 billion. This growth was mainly due to a rapidly growing service sector. Amazon Web Services revenue rose 17%, and AWS is now running at an annual pace of $100 billion, thanks to surging demand for AI-powered cloud services.

Amazon has a great opportunity to expand its software-as-a-service platform in the coming years as more companies modernize their tech infrastructure. The e-commerce segment 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 growth areas. “It’s still very early in all of our operations,” CEO Andy Jassy told investors in late April.

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The even better news for investors is that Amazon is finally allowing its growth to translate into significant financial gains. Free cash flow last year was $50 billion, compared to an outflow of $3 billion a year earlier. Profits more than tripled last quarter to $10 billion.

The share’s valuation is also still attractive. Shares are priced today at 3.4 times sales, which is about double the low investors saw in early 2023. However, that still translates into a price-to-earnings ratio discount of more than 4 in the later stages of the pandemic. At that price, Amazon should deliver strong returns for long-term investors in 2024 and beyond.

Should You Invest $1,000 in Garmin Now?

Before you buy shares in Garmin, consider the following:

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 ten stocks that survived the cut could deliver monster returns in the coming years.

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Think about when Nvidia created this list on April 15, 2005… if you had $1,000 invested at the time of our recommendation, you would have $578,143!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including portfolio building guidance, regular analyst updates and two new stock picks per month. The Stock Advisor is on duty more than quadrupled the return of the S&P 500 since 2002*.

View the 10 stocks »

*Stock Advisor returns May 13, 2024

Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, 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 has positions in 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.

2 Growth Stocks That Could Skyrocket in 2024 was originally published by The Motley Fool

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