Growth boosts valuation multiples, but it doesn’t always last forever. Companies that cannot maintain it are often penalized with large declines in market value, a lesson ingrained in investors who lost money in tech stocks during 2022.
Deciphering which businesses can sustain their high growth rates is a challenge for even the most seasoned professionals, which is why we started StockStory. That said, here are three growth stocks expanding their competitive advantages.
CrowdStrike (CRWD)
One-Year Revenue Growth: +23.5%
Known for detecting the massive SolarWinds hack in 2020 that compromised numerous government agencies, CrowdStrike (NASDAQ:CRWD) provides cloud-based cybersecurity solutions that protect endpoints, cloud workloads, identity, and data through its Falcon platform.
Why Do We Love CRWD?
- Billings have averaged 25% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Estimated revenue growth of 21.6% for the next 12 months implies its momentum over the last two years will continue
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
At $479.13 per share, CrowdStrike trades at 22.8x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Palantir Technologies (PLTR)
One-Year Revenue Growth: +38.8%
Named after the all-seeing stones in "Lord of the Rings," Palantir Technologies (NASDAQ:PLTR) develops software platforms that help government agencies and enterprises integrate, analyze, and operationalize their data for decision-making.
Why Are We Backing PLTR?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 44.2% over the last year
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Palantir Technologies’s stock price of $176.90 implies a valuation ratio of 93.3x forward price-to-sales. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
Sprouts (SFM)
One-Year Revenue Growth: +16.8%
Playing on the secular trend of healthier living, Sprouts Farmers Market (NASDAQ:SFM) is a grocery store chain emphasizing natural and organic products.
Why Will SFM Outperform?
- Rapid rollout of new stores to capitalize on market opportunities makes sense given its strong same-store sales performance
- Same-store sales growth averaged 7.5% over the past two years, showing it’s bringing new and repeat shoppers into its stores
- Exciting sales outlook for the upcoming 12 months calls for 11.8% growth, an acceleration from its six-year trend
Sprouts is trading at $111.25 per share, or 19.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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