The year is coming to an end, and what a year it has been for the stock market. At the time of writing, the S&P500, Nasdaq CompositeAnd Dow Jones Industrial Average have increased by 26%, 28% and 19% respectively.
That said, there are many growth stocks that have easily outperformed benchmark indexes and could be worth considering in the long term. Here are three investors to know about.
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First upwards is streaming giant Spotify (NYSE: SPOT).
The company, which operates the most popular music streaming app in the world, continues to impress the markets with its growth. In its most recent quarter (the three months ended September 30), Spotify reported 640 million monthly active users (MAUs), up 11% from 574 million MAUs a year ago.
Additionally, the company’s number of paying subscribers rose 12% to 252 million. Paid subscribers are undoubtedly even more important figure to Spotify, as its subscription fees make up 88% of the company’s total gain.
At the same time time As the company has ramped up the conversion of total MAUs into paying subscribers, management has also cut costs. Accordingly, Spotify’s profitability has soared. The company reported operating income of 454 million euros, compared to only 32 million euros a year earlier.
In summary, Spotify gives growth-oriented investors what they want to see. The company’s user base, revenue and profits are all expanding as Spotify continues to enter new markets and grow its subscriber base. That’s a recipe for continued success, which is why investors should view it as a buy-and-hold stock for the long term.
Then there is Reddit (NYSE:RDDT).
Reddit only debuted less than a year ago via an initial public offering (IPO). Still, at the time of writing, the stock is up a remarkable 180%.
It’s all thanks to Reddit big three financial metrics:
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Robust revenue growth
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Strong user growth
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Sky-high gross margin
Starting with revenue, Reddit grew its quarterly revenue (for the three months ending September 30) to $348 million – a 68% increase year over year. Similarly, the company’s daily active unique values (DAUqs) rose 47% to 97 million.
That’s rapid growth, and best of all, the company is capitalizing on it grow by increasing its profitability. Gross profit margin rose to 90% in the most recent quarter – the best ever for the company, and more than 200 basis points higher than the same period a year ago.