In this article, we take a look at 12 high growth NASDAQ stocks that are profitable. If you want to see more high growth NASDAQ stocks that are profitable, go directly to 5 High Growth NASDAQ Stocks That Are Profitable.
The NASDAQ stock market, otherwise known as the NASDAQ, was founded in 1971 as the first electronic stock exchange.
NASDAQ stocks are simply stocks listed on the stock exchange that is the NASDAQ.
Although it is known for being the home to many tech stocks, the stock exchange also has many non tech stocks listed as well.
Given the growth in the tech sector over the last several decades, arguably the best known stocks are some leading tech stocks.
Some of the leading tech stocks are also pretty profitable given they have substantial scale and competitive advantages.
Profitable stocks generally have flexibility in that they can use their profits to reinvest in their business or to help fund M&A to potentially expand. Profitable stocks, depending on what management decides, can also return excess capital back to shareholders through dividends or share buybacks.
High Growth
For this article, we define high growth as a stock with an EPS next 5 year ratio of over 10%. For those of you interested, check out 10 High Growth Low Dividend Stocks to Buy.
What is high growth varies from industry to industry. It also varies from time to time in terms of what the economy is in the economic cycle.
In terms of the present day, it’s uncertain where the economy is in the economic cycle.
Unemployment in the United States is low and the economy is growing. Yet the Federal Reserve has raised interest rates substantially last year and it is expected to raise rates further this year.
On Friday, the Commerce Department showed that the personal consumption expenditures price index increased 5.4% last month from the same month in the prior year, an actual rise from the 5.3% annual pace in December of 2022.
Meanwhile, the underlying ‘core’ inflation also rose 4.7% from a year earlier, versus December 2022’s 4.6% pace.
As a result, Cleveland Fed President Loretta Mester said, “It’s going to take more effort on the part of the Fed to get inflation on that sustainable downward path to 2%.”
If the Federal Reserve raises interest rates too much, the economy could slow or even enter into a recession. If that’s the case, the average earnings growth could slow or even go negative. Many leading NASDAQ stocks could also see their earnings decline if the economy worsens.
Given the market is uncertain, it could be a good idea for long term investors to own a well diversified portfolio of leading stocks across many different sectors.
Methodology
For our list of 12 High Growth NASDAQ Stocks That Are Profitable, we chose 12 stocks listed on the NASDAQ with competitive advantages that were profitable in terms of their TTM net income according to YCharts and that also had EPS Next 5 year ratios of over 10%.
We ranked the stocks based on their EPS next 5 year ratio according to FINVIZ.com.
EPS Next 5 Year Ratio is the estimated average annual EPS growth rate in the next 5 years.
Given EPS Next 5 Year Ratio is an estimate, it can change from time to time depending on economic events, company specific events, and analyst view changes.
The net income data might not be adjusted and it could be over different time periods since different companies have different fiscal years.
12 High Growth NASDAQ Stocks That Are Profitable
12. Costco Wholesale Corporation (NASDAQ:COST)
EPS Next 5 Year Ratio: 10.40%
Net Income (TTM) as of November 30, 2022: $5.884 billion
Costco Wholesale Corporation (NASDAQ:COST) is expected to grow EPS on average by 10.4% a year for the next five years as comparable sales are expected to rise and the company continues to add stores. For fiscal year 2022, the company’s comparable sales rose 14% year over year and Costco Wholesale Corporation (NASDAQ:COST) added 23 net new locations including 14 in the United States. In the future, Costco Wholesale Corporation (NASDAQ:COST) could have international growth potential considering 583 of the company’s 847 locations as of December 31, 2022 were in the United States and Puerto Rico.
As it stands, Costco Wholesale Corporation (NASDAQ:COST) already has substantial scale given its fiscal 2022 revenues of $222.7 billion. The company also had trailing twelve month net income of $5.884 billion as of November 30, 2022 according to YCharts.
Alongside Interactive Brokers Group, Inc. (NASDAQ:IBKR), ASML Holding N.V. (NASDAQ:ASML), and Marriott International, Inc. (NASDAQ:MAR), Costco Wholesale Corporation (NASDAQ:COST) is a NASDAQ listed stock that’s profitable and that has a fairly high expected EPS growth rate for the next 5 years.
11. Microsoft Corporation (NASDAQ:MSFT)
EPS Next 5 Year Ratio: 11.77%
Net Income (TTM) as of December 31, 2022: $67.45 billion
Microsoft Corporation (NASDAQ:MSFT) ranks #11 on our list of 12 High Growth NASDAQ Stocks That Are Profitable given the company is expected to increase its earnings per share by an average of 11.77% a year over the next 5 years. One reason for the expected increase in EPS is that Microsoft Corporation (NASDAQ:MSFT)’s cloud business is expected to continue to expand. According to Synergy Research, Microsoft increased its share of the Iaas, PaaS and Hosted Private Cloud combined market to 23% in Q4 2022 from a 21% average over the previous four quarters. Microsoft Corporation (NASDAQ:MSFT) is already a very profitable company with trailing twelve month net income of $67.45 billion.
10. Cintas Corporation (NASDAQ:CTAS)
EPS Next 5 Year Ratio: 12.21%
Net Income (TTM) as of November 30, 2022: $1.286 billion
Cintas Corporation (NASDAQ:CTAS) is a leading uniform and business supply company that has grow sales and adjusted EPS in 51 of the past 53 years.The company has also increased the annual dividend each year since 1983. In terms of buybacks, Cintas Corporation (NASDAQ:CTAS)’s board of directors on July 26, 2022 approved an additional share buyback program of up to $1 billion in addition to the company’s existing authorization of $0.5 billion. For the trailing twelve months as of November 30, 2022, Cintas Corporation (NASDAQ:CTAS) has net income of $1.286 billion according to YCharts. The company also has an EPS next 5 year ratio of 12.21%.
9. Automatic Data Processing (NASDAQ:ADP)
EPS Next 5 Year Ratio: 13.43%
Net Income (TTM) as of December 31, 2022: $3.146 billion
Automatic Data Processing (NASDAQ:ADP) is a global technology company providing human capital management solutions including payroll services. Given industry growth, Automatic Data Processing (NASDAQ:ADP) is growing. For fiscal 2023 second quarter, Automatic Data Processing (NASDAQ:ADP)’s sales rose 9% year over year to $4.4 billion and adjusted net earnings rose 17% year over year to $815 million. Adjusted diluted EPS rose 19% year over year to $1.96 and the company also maintained full year guidance of 8% to 9% revenue growth and 15% to 17% adjusted diluted EPS growth. Automatic Data Processing (NASDAQ:ADP) had a net income of $3.146 billion for 2022 and the company also has an EPS next 5 year ratio of 13.43%.
8. Alphabet Inc. (NASDAQ:GOOG)
EPS Next 5 Year Ratio: 15.51%
Net Income (TTM) as of December 31, 2022: $59.97 billion
Alphabet Inc. (NASDAQ:GOOG) is a tech giant that’s very profitable with net income of $59.97 billion. Analysts think the company will grow earnings per share by an average of 15.51% a year over the next five years but the market might be thinking the company’s earnings growth could be substantially lower than that given the company’s earnings valuation. Considering AI competition, Alphabet Inc. (NASDAQ:GOOG) could lose market share or it could see an increase in costs even though AI like Bing incorporated ChatGPT still makes a lot of mistakes. Before ChatGPT, Alphabet Inc. (NASDAQ:GOOG) was regarded as one of the leaders in AI given its substantial investments in the area over the past decade. It remains to be seen what products those investments can create and how profitable those products will be. Alphabet Inc. (NASDAQ:GOOG) is the riskiest stock on our list given AI disruption even though it also has a lot of opportunity from AI as well.
7. Dollar Tree, Inc. (NASDAQ:DLTR)
EPS Next 5 Year Ratio: 17.22%
Net Income (TTM) as of October 31, 2022: $1.617 billion
Dollar Tree, Inc. (NASDAQ:DLTR) ranks #7 on our list of 12 High Growth NASDAQ Stocks That Are Profitable with an EPS next 5 year ratio of 17.22%. Although discount retail stores aren’t tech companies, Dollar Tree, Inc. (NASDAQ:DLTR) is nevertheless listed on the Nasdaq which also has numerous other non tech companies listed on the exchange. Dollar Tree, Inc. (NASDAQ:DLTR) is profitable with a trailing twelve month net income of $1.617 billion as of October 31, 2022. As of 2/25, the company has a forward P/E ratio of 18.2.
6. Starbucks Corporation (NASDAQ:SBUX)
EPS Next 5 Year Ratio: 18.02%
Net Income (TTM) as of December 31, 2022: $3.321 billion
Leading coffee chain Starbucks Corporation (NASDAQ:SBUX) ranks among the high growth stocks listed on the Nasdaq given analysts expect the company to grow its EPS by an average of 18.02% a year over the next 5 years. For full year fiscal 2022, the company’s global comparable store sales rose 8% year over year, driven by a 5% increase in average ticket and a 2% increase in comparable transactions. North America comparable store sales rose 12% year over year. Starbucks Corporation (NASDAQ:SBUX) also opened 763 net new stores in the fourth quarter, ending the period with 35,711 stores globally with 51% company operated and 49% licensed. The company had net income of $3.321 billion in 2022.
Like Starbucks Corporation (NASDAQ:SBUX), Interactive Brokers Group, Inc. (NASDAQ:IBKR), ASML Holding N.V. (NASDAQ:ASML), and Marriott International, Inc. (NASDAQ:MAR) are NASDAQ listed stocks that are profitable and that have a fairly high expected EPS growth rate for the next 5 years.
Click to continue reading and see 5 High Growth NASDAQ Stocks That Are Profitable.
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Disclosure: None. 12 High Growth NASDAQ Stocks That Are Profitable is originally published on Insider Monkey.
