In this article, we will discuss the 13 High Growth Consumer Stocks To Buy. You can skip our industry overview and go directly to the 5 High Growth Consumer Stocks To Buy.
The stock market comprises various sectors, each with its unique attributes. Consumer discretionary and consumer staples are two different sectors in the stock market that cater to different consumer needs and preferences. However, stocks in these sectors can be termed consumer stocks, as companies in these sectors offer services and products to everyday consumers.
Consumer discretionary stocks represent companies that provide non-essential goods and services that consumers may buy when they have discretionary income, such as luxury items, entertainment, and travel. These companies tend to be more cyclical in nature and are influenced by the overall economic conditions. Some examples of consumer discretionary stocks include Amazon.com Inc. (AMZN), Tesla Inc. (TSLA), and LVMH Moet Hennessy Louis Vuitton SE (LVMHF).
On the other hand, consumer staples stocks represent companies that provide essential goods and services that consumers need regardless of the economic conditions, such as food, beverages, and household products. These companies tend to be less cyclical in nature and are considered defensive stocks that may perform well during economic downturns. Some examples of consumer discretionary stocks include Procter & Gamble Co (PG), Nestle SA (NSRGY), and Coca-Cola Co (KO).
Consumer staples companies are generally well-established companies with a high brand value and have a long history of operating in all economic cycles. These companies are generally dividend-paying and are good investment options for investors looking for low-risk and safe returns. In 2022, The S&P 500 consumer staple sector (.SPLRCS) outperformed the broader market as investors looked for safe-haven stocks after the Fed started its interest rate hiking cycle.
The impact of higher interest rates and a slowing economy was evident on consumer discretionary stocks as consumers reduced spending and focused on increasing savings. The consumer discretionary subindex saw a drastic drop in value by over 37% in 2022. The red-hot inflation coupled with a slowing economy has meant that consumers are now prioritizing spending money on essential stuff like rent and food instead of discretionary items. This is the reason why consumer staple stocks have remained strong in the face of a sell-off in the equity market. The Consumer Staples Select Sector SPDR Fund is down only 0.35% over the past year, outperforming the broader market by far.
To come up with 13 high growth consumer stocks to buy, we have used stock screeners to identify high growth consumer stocks. We filtered the stocks with at least $500 million in market capitalization and revenue growth of at least 30% YoY. The year-over-year growth metric used to screen the stocks calculates the percentage change of the trailing twelve month revenues compared to the twelve month’s prior. We then proceeded to rank the companies in ascending order of their revenue growth.
High Growth Consumer Stocks To Buy
13. EVgo, Inc. (NASDAQ:EVGO)
Revenue Growth YoY: 78.36%
EVgo, Inc. (NASDAQ:EVGO) is a direct current (DC) fast-charging network operator in the US. The company provides its services at its deployed stations. EVgo, Inc. (NASDAQ:EVGO) collaborates with several grocery chain stores, shopping centers, parking lot operators, hotels, gas stations, independent property owners, and local governments to deploy its EV charging stations. EVgo, Inc. (NASDAQ:EVGO) operates over 850 fast charging stations in more than 30 states and 60 metropolitan areas.
In addition to EVgo, Inc. (NASDAQ:EVGO), Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND), Solid Power, Inc. (NASDAQ:SLDP), and Celsius Holdings, Inc. (NASDAQ:CELH) are included in our list of 13 high growth consumer stocks to buy.
According to Insider Monkey’s database, 17 hedge funds held stakes worth $15 million in EVgo, Inc. (NASDAQ:EVGO) in Q4 2022, compared to 14 funds in the prior quarter with stake worth $31 million.
12. Cal-Maine Foods, Inc. (NASDAQ:CALM)
Revenue Growth YoY: 78.76%
Cal-Maine Foods, Inc. (NASDAQ:CALM) is a fresh-egg-producing company based in the United States. The company’s product portfolio comprises specialty shell eggs, including cage-free, organic, nutritionally enhanced, and brown eggs. These products are offered under various brand names, including Eggland's Best, Inc., Land O'Lakes, Inc, 4-Grain, and Farmhouse Eggs.
As of May 28, 2022, Cal-Maine Foods, Inc. (NASDAQ:CALM) had a flock of around 42.2 million layers (mature female chickens) and 11.5 million pullets (female chickens below 18 weeks of age) and breeders (male and female chickens used for breeding).
Third Avenue Management made the following comment about Cal-Maine Foods, Inc. (NASDAQ:CALM) in its Q4 2022 investor letter:
“BrightSphere Investment Group, and Cal-Maine Foods, Inc. (NASDAQ:CALM) were eliminated. BrightSphere and Cal Maine were both prototypical time-arbitrage/special situation investments. At the time of original purchase, asset manager, BrightSphere was undergoing a transformation leading to a series of asset sales in 2021. A large portion of the proceeds were returned via a tender offer in December 2021. After shares rose roughly 25% in the fourth quarter, the remaining position was monetized to redeploy into other more attractive securities. Egg producer, Cal Maine, was purchased during the depths of Covid at a deeply discounted valuation. As inflation grips the economy, Cal Maine has benefitted from consumers flocking to cheap sources of protein. In addition, an outbreak of bird flu in the US has disrupted supply. Fortunately, Cal Maine’s flock was spared from bird flu and the company was able to benefit from higher prices without experiencing supply disruptions. Cal Maine’s share price rose 70% in 2022 reaching a valuation meaningfully above our estimate of net asset value. Like BrightSphere, the position was eliminated to raise capital for better opportunities. Selling is not a decision Fund Management takes lightly. The time-arbitrage/ special situation bucket is comprised of companies where the thesis is dependent on an event of change in cycle dynamics. In both cases, the thesis played out as expected and given the valuation improvement, the securities were no longer a good fit for the portfolio.”
11. Xometry, Inc. (NASDAQ:XMTR)
Revenue Growth YoY: 84.95%
Headquartered in the United States, Xometry, Inc. (NASDAQ:XMTR) operates a marketplace for industrial parts. The company provides a platform where buyers can source manufactured parts on demand. The machinery available on the platform includes CNC machines, sheet metal, 3D printers, and injection molding machines. Xometry, Inc. (NASDAQ:XMTR) provides access to over 2000 manufacturing workshops in more than 25 European countries.
On January 31, 2023, Greg Palm, an analyst at Craig-Hallum, started covering Xometry, Inc. (NASDAQ:XMTR) with a price target of $48 and a Buy rating on the company’s shares. According to the analyst, the company is on the verge of EBITDA profitability as the revenue is growing at an intense pace with accelerated gross margin improvement.
10. Li Auto Inc. (NASDAQ:LI)
Revenue Growth YoY: 86.29%
Headquartered in China, Li Auto Inc. (NASDAQ:LI) is an electric vehicle manufacturer. The company engages in the design, production, and sale of new energy vehicles (NEVs) in China. The company offers two flagship model series, the Li series and the Ideal series. Each of these series has four distinct models: the L7, L8, L9, and One. In addition, Li Auto Inc. (NASDAQ:LI) provides services related to technology development, sales management, and corporate management.
On February 9, 2023, Jeff Chung, an analyst at Citi, increased his price target on Li Auto Inc. (NASDAQ:LI) to $51.50 from $48 while keeping a Buy rating on the company’s shares. The analyst has adjusted his 2023 sales forecast of the company to 235,000 units, up from 210,000 units after the recent product launches.
As per Insider Monkey’s database, 25 hedge funds held stakes worth $690 million in Li Auto Inc. (NASDAQ:LI) in Q4 2022, compared to 20 funds in the prior quarter with stake worth $1.0 billion.
9. Rover Group, Inc. (NASDAQ:ROVR)
Revenue Growth YoY: 88.31%
Rover Group, Inc. (NASDAQ:ROVR) is an online pet care company based in the United States. The company offers pet care services such as in-home pet sitting, pet daycare, drop-in visits, dog walking, training, and grooming. Rover Group, Inc. (NASDAQ:ROVR) has over 500,000 pet care providers throughout Europe and North America.
On January 11, 2023, Andrew Boone, an analyst at JMP Securities, reduced his price target on Rover Group, Inc. (NASDAQ:ROVR) to $6 from $8 while keeping an Outperform rating on the company’s shares. The analyst believes that the second half of 2022 has seen a slowdown in travel demand, which has led him to take a more cautious stance on forecasts for next year, given macroeconomic worries.
8. Luminar Technologies, Inc. (NASDAQ:LAZR)
Revenue Growth YoY: 90.25%
Luminar Technologies, Inc. (NASDAQ:LAZR) is an American automotive technology and software company. Luminar Technologies, Inc. (NASDAQ:LAZR) operates in the segments of autonomy solutions and components. The company produces and sells lidar (laser imaging, detection, and ranging) and offers other autonomy and perception solutions mainly for original equipment manufacturers (OEMs) in the automotive and related industries. The products include a hardware product called Iris lidar and a full-stack solution named Sentinel.
On December 7, 2022, Itay Michaeli, an analyst at Citi, lowered the price target on Luminar Technologies, Inc. (NASDAQ:LAZR) to $20 from $21 while keeping a Buy rating on the company’s stock.
7. Membership Collective Group Inc. (NYSE:MCG)
Revenue Growth YoY: 97.08%
Membership Collective Group Inc. (NYSE:MCG) runs a multinational membership platform for digital and physical spaces that connects people around the world. The members are provided a platform where a diverse group of people can connect, socialize, work, and flourish. Membership Collective Group Inc. (NYSE:MCG) has a network of 38 Soho Houses, 9 Soho Works clubs, Soho Home, Scorpios Beach club in Mykonos.
On January 18, 2023, George Kell, an analyst at Roth Capital, started covering Membership Collective Group Inc. (NYSE:MCG) with a price target of $7 and a Buy rating. The analyst believes that the company will swiftly regain its footing given the manageable leverage and management's focus on profitability.
6. XPeng Inc. (NYSE:XPEV)
Revenue Growth YoY: 98.06%
XPeng Inc. (NYSE:XPEV) is a Chinese smart electric vehicle company. The company engages in the design, production, marketing, and sale of smart electric vehicles and parts and also provides finance and maintenance services. The product portfolio of the company includes SUVs, sports sedans, and family sedans. XPeng Inc. (NYSE:XPEV) has also developed an ADAS (advanced driver assistance system) called Xpilot, which is a smart hardware-based operating system for vehicles.
On December 13, 2022, Yuqian Ding, an analyst at HSBC, reduced his price target on XPeng Inc. (NYSE:XPEV) to $15 from $34 while keeping a Buy rating on the company’s stock. The analyst expects the company’s restructuring to generate more value.
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Disclosure: None. 13 High Growth Consumer Stocks To Buy is originally published on Insider Monkey.