7 Growth Stocks to Buy for the Next Bull Run: February 2024
Bull runs turn many patient investors into wealthy ones. These stampedes bring stock prices higher and reward people who take on a buy-and-hold approach.
You don’t have to time the market and analyze the stock market every day. Buying and holding reliable growth stocks can lead to more returns without as much effort. While the Federal Reserve hasn’t committed to lowering interest rates in March, interest rates are likely to go down in 2024. That catalyst and other can trigger a new bull run, and these stocks stand to benefit.
Perion (PERI)
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Perion (NASDAQ:PERI) is a $1.5 billion advertising company that has delivered a 5-year gain above 800% for its investors. The company has tapped into several high-growth advertising channels. The company has no debt and recently put its extra capital to use with a $100 million acquisition of Hivestack. The acquired firm specializes in digital out-of-home advertising and has several corporations as its partners.
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Perion isn’t only growing via partnerships. The company recently announced a partnership with Amazon (NASDAQ:AMZN) for its Vidazoo Platform. This partnership allows Perion’s advertisers to tap into Amazon Publisher Services and can lead to “a significant volume of premium demand from leading advertisers.” The partnership will help Perion work with leading publishers and connect them with premium advertisers.
Perion trades at a 10 forward P/E ratio and has a 0.46 PEG ratio. A major catalyst is the likely contract extension between Perion and Bing later in the year. This partnership represents roughly 45% of Perion’s total revenue and has been a boon for Perion and Bing.
Cloudflare (NET)
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Many businesses rely on the internet to reach new customers and generate revenue. However, the digital world has many intrusion points that hackers can exploit. More companies are turning to Cloudflare (NYSE:NET) to keep their websites up and running.
Cloudflare is a cloud services provider and offers an enterprise-grade content delivery network. This dynamic results in faster load times, lower costs, and better protection against hackers.
Cloudflare’s services continue to experience heightened demand. The company grew revenue by 32% year-over-year in the third quarter of 2023. The firm narrowed its GAAP net losses from $42.5 million in losses to $23.5 million in losses.
The stock can get more enticing as Cloudflare gets closer to profitability, but investors have already been loading up on shares. The equity is up by 57% over the past year and has gained 361% over the past five years.
Cloudflare innovated and accelerated its efforts in artificial intelligence to strengthen its product offerings. This development can increase retention rates and lead to higher subscription costs in the future.
Alphabet (GOOG,GOOGL)
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Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) achieved double-digit revenue growth rates across its two key verticals: advertising and the cloud. Revenue in the Google advertising segment was up by 11.0% year-over-year while Google Cloud revenue jumped by 25.7% year-over-year.
Those segments and Alphabet’s other verticals resulted in 13% year-over-year revenue growth for the company as a whole in Q4 2023. Alphabet’s “Other Bets” segment almost tripled year-over-year, and comments from Alphabet’s CFO Ruth Porat suggest that those investments will continue.
“We remain committed to our work to durably re-engineer our cost base as we invest to support our growth opportunities,” Porat stated in the press release.
Alphabet achieved revenue and earnings growth while reducing its employee count by almost 8,000. The company let go roughly 4% of its workforce in 2023. Google Cloud once again delivered high profits while the company’s “Other Bets” segment delivers a relatively small net loss. Alphabet managed to narrow losses across this division.
HubSpot (HUBS)
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HubSpot (NYSE:HUBS) is a customer relationship management platform that helps businesses grow. The company has over 194,000 customers in 120 countries and has a range of affordable and high-end plans.
The tech software firm increased revenue by 26% year-over-year in Q3 2023 and significantly narrowed its net losses. The company looks like it is on the verge of profitability and should scale up its profit margins quickly.
This development would help the stock tremendously, but it has already been on an incredible run. Shares are up by 68% over the past year and have gained 270% over the past five years. HubSpot is charging closer to the all-time high it set in 2021.
The company’s customer base grew by 225% year-over-year which indicates solid demand for the platform. HubSpot is making money by raising its prices and getting customers to upgrade their plans. However, the ability to still attract new customers at this high rate points to more gains.
Elf Beauty (ELF)
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Elf Beauty (NYSE:ELF) has outperformed the S&P 500 over several years. The index’s 79% gain over the past five years falls well below the beauty firm’s 1,790% gain during the same period. Elf Beauty has robust revenue and net income growth that suggest it can continue to outperform the index.
However, there is another catalyst for this stock that investors may be overlooking. Elf Beauty currently has a market cap just shy of $9 billion. This high growth stock is getting closer to the critical $12.7 billion market cap threshold.
Why is this number important? A company must exceed $12.7 billion in market cap to be considered for inclusion in the S&P 500 index. Elf Beauty fulfills the other key requirements and can get added to the index in the future. The equity has to rally by close to 50% from current levels to be within the range of S&P 500 inclusion.
Getting added to the index can help shares reach all-time highs as fund managers have to load up on the stock. However, the company is already doing just fine with 76% year-over-year revenue growth and 184% year-over-year net income growth in Q2 FY24.
Supermicro (SMCI)
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Supermicro (NASDAQ:SMCI) shares soared to an all-time high after the firm reported earnings. While the stock quickly lost some ground, it indicates plenty of excitement for the stock.
That excitement can continue to build as other artificial intelligence leaders report earnings. Supermicro also seems poised to beat its guidance in the third quarter of fiscal 2024 based on the rapid acceleration in business during the previous quarter.
Revenue more than doubled year-over-year in the second quarter of fiscal 2024 while net income increased by 68.2% year-over-year. CEO Charles Liang expressed optimism that the company is generating more demand.
“While we continue to win new partners, our current end customers continue to demand more Supermicro’s optimized AI computer platforms and rack-scale Total IT Solutions,” he stated.
Supermicro offers great potential as it is, but an S&P 500 inclusion can help shares soar higher. Supermicro meets the standards for S&P 500 inclusion. The company has a market cap over $12.7 billion and reported positive earnings in the most recent quarter and year.
Institutional investors will be forced to buy more shares for funds that track the S&P 500. This development will reward investors who accumulate SMCI stock before the inclusion.
Celsius Holdings (CELH)
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Celsius Holdings (NASDAQ:CELH) is a small sports beverage company that is quickly becoming mainstream. The equity has a $12 billion market cap and has gained more than 3,700% over the past five years.
The stock trades at a lofty 45 forward P/E ratio but has many growth catalysts that suggest a premium valuation is warranted. The firm grew its net income by 146% year-over-year in a record-breaking quarter. Revenue growth came in at 104% year-over-year.
Celsius Holdings enjoys an elevated 21.8% net profit margin and hasn’t even cracked into the international markets yet. The sports beverage company is just getting started on this venture as a partnership with Pepsi (NASDAQ:PEP) makes it more feasible.
Building an international presence can help Celsius Holdings maintain triple-digit year-over-year revenue growth for several quarters or even multiple years. The growth engine can continue to reward investors who set lengthy time horizons for their positions.
On this date of publication, Marc Guberti held long positions in PERI, NET, ELF, SMCI, and CELH. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.
Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.
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