Growth stocks are your best bet for ensuring that your investment portfolio not only beats inflation, but also steadily increases in value to help you better prepare for retirement. Many investors praise the strengths and advantages of the “Magnificent Seven” group of stocks and are familiar with their characteristics.
The problem with large growth stocks is that size itself is a limiting factor: it can be difficult for a large organization to grow quickly. This is why it is preferable to focus on medium-growth companies. Their small size and customer base give them significant room to grow quickly, supported by increasing demand for their products or services. It helps if they have tailwinds that can propel their revenues and profits higher, helping the stock price do the same.
With these characteristics, these stocks could multiply your wealth faster than larger growth stocks. Here are three stocks that could grow your investment portfolio fivefold or more by 2030.
1.Fortinet
Fortinet (NASDAQ:FTNT) is a cybersecurity company with a portfolio of more than 50 enterprise products. The company uses machine learning and artificial intelligence (AI) technologies to identify threats and keep organizations secure. As more companies digitize and use cloud software, Fortinet also stands to benefit from increased demand for its products.
For 2023, the company’s revenue rose 20.2% year-over-year to $5.3 billion, while operating profit jumped 28% to $1.2 billion. dollars. Net income was $1.1 billion for the year, up nearly 34%. The company also generated positive free cash flow of $1.7 billion for 2023, almost 20% higher than that generated the previous year.
This momentum continued into the first quarter of 2024, as Fortinet reported a 7% year-over-year improvement in revenue to $1.35 billion. It’s worth noting that services revenue jumped 24% to $944 million for the quarter, and the cybersecurity specialist also generated positive free cash flow of $609 million.
In early May, Fortinet announced the industry’s first generative Internet of Things (IoT) security assistant to improve software operations and enable any individual to use natural language to use the software, eliminating the need to specifically train staff to manage the software.
Management has identified a total addressable market of $144 billion this year, which could potentially reach $222 billion by 2028, giving the company ample opportunities to grow revenue and profits over time .
2. Brazing
Brazing (NASDAQ:BRZE) provides a customer engagement platform that allows marketers to collect and analyze data from any source. By doing so, these marketers can better engage their customers and tailor their messages across different channels.
The company reported encouraging financial numbers for its 2024 fiscal year, which ended January 31, 2024. Revenue climbed 32.7% year over year to $471.8 million, with gross margin up 35.3% year over year to $324.3 million. Operating cash flow turned positive for fiscal 2024 and Braze is on track to generate positive free cash flow. The company forecasts revenue of $572.5 million for fiscal 2025, a growth rate of 21.3%.
Braze is also enjoying strong popularity when it comes to attracting customers. Total customers increased 15% year over year to 2,044 in the fourth quarter of the fiscal year, while customers with more than $500,000 in annual recurring revenue climbed 29%. ‘year over year to reach 202. The total remaining performance obligations jumped 40% year over year. year to $639.2 million, also for the fourth quarter.
The company is not limited to specific sectors but is expanding to different sectors such as media and entertainment, health and fitness, and travel and hospitality in search of more customers. Braze is also expanding internationally in countries like Singapore, Indonesia and Australia, and management is finding opportunities in different facets of many organizations.
With its unique value proposition and growing presence in 75 countries, Braze looks set to continue its meteoric growth.
3. Samsara
samsara (NYSE:IOT) operates a platform that helps complex organizations improve their security and efficiency. The company uses artificial intelligence (AI)-based programs to protect employees, improve asset utilization and reduce maintenance costs.
Samsara reported a nearly 44% year-over-year increase in revenue to $937.4 million for its 2024 fiscal year, which ended February 3, 2024. Gross profit soared nearly 47% year over year to $690.4 million. The company has seen a big improvement in operating cash flow, going from negative $103 million the year before to negative $11.8 million, and may soon be on track to cash flow positive operating performance.
Samsara has also seen good customer momentum, with customers paying more for the company’s services. For the fourth quarter of fiscal 2024, customers with $100,000 or more in annual recurring revenue (ARR) jumped 49% year over year to 1,848, while those paying $1 million dollars or more in ARR jumped 61% year over year to 82. over $100,000 in ARR now represents just over half of Samsara’s total customer base, up from 45% ago two years.
The company’s strategy of “land and expand” showed that 53% of its net new annual contract value (ACV) was made up of expanding customers, while the rest was made up of new customers. Additionally, 16% of last quarter’s net new ACV came from international customers, demonstrating Samsara’s ability to expand its network to more countries. Samsara expects fiscal 2025 revenue to grow 27% to 28%, which would bring total sales to about $1.19 billion at the midpoint.
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Royston Yang has no position in any of the stocks mentioned. The Motley Fool holds positions at and recommends Fortinet. The Motley Fool recommends Braze and Samsara. The Motley Fool has a disclosure policy.
3 Stocks That Could Turn $1,000 into $5,000 by 2030 was originally published by The Motley Fool
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