In this article, we will take a detailed look at the most profitable growth stocks to buy now.
The growth factor in investing refers to companies that grow their revenue and earnings at rates significantly above the market. These companies are usually small and young, operate in high-growth and less mature industries, and often lack the financial stability and resilience of their more mature counterparts. As a result, the growth factor becomes highly attractive and outperforms during secular bull markets (such as the 2010-2021 period) dominated by macroeconomic stability and low interest rates. On the other hand, the return of growth stocks significantly lags behind during bear markets or periods of heightened uncertainty and volatility. For reference, the growth factor underperformed significantly during the 2022 bear market as well as the 2025 year-to-date.
While the growth strategy delivers superior returns most of the time, we believe there are ways to refine it and make it more reliable. One of the weaknesses of most growth stocks is weak profitability (due to aggressive investments in working capital for growth or R&D), which makes them more susceptible to economic downturns. The solution to this is to incorporate a profitability criterion as well – growth stocks with strong profitability will navigate economic slowdowns better and hold up well even during recessions. Our hypothesis is confirmed by modern financial research; the Fama-French 5-Factor Model (2015) introduced a profitability factor which, as the authors claim, can explain stock returns – stocks of companies with high profitability tend to outperform those with low profitability.
READ ALSO: 10 Most Profitable Blue Chip Stocks to Buy Now
As legendary Warren Buffett has advised, to be greedy when others are fearful, we believe the best way to make money in the market is to engage in smart contrarian bets when everyone else is reluctant. The US stock market is still more than 10% below its all-time high as market participants are still digesting the tariffs situation as well as the new economic data, which is quite disappointing. The Philadelphia Fed manufacturing index decreased to -26.4 in April, well below expectations and the lowest reading since April 2023. It is also the second lowest level outside of official recessions, which hints towards the possibility that we are already in a recession that will only be declared at a later date. The employment, shipments, and new orders components all decreased as well, further pointing towards a slowing economy.
Business surveys have also been quite grim – Hamilton Lane recently reported that at least 62% of CEOs see a recession on the horizon, while the 6-month Capex expectations fell to the lowest level since the pandemic. It is now clear that pretty much everyone is thinking about a recession now, and that’s actually the most bullish indicator out there. The stock market is a forward-looking animal, meaning that its prices reflect the state of the economy 6-12 months from now. Given that the average recession in the US has historically lasted for about 3-4 quarters, and assuming that revised Q1 2025 data will be later recognized as the beginning of the recession, odds are that the US economy will already return to growth in calendar 2026. Also, history shows that the forward-looking stock market tends to disappoint the majority of investors, which means that if the majority expects a recession, then odds are that it is already priced in and that the market bottom is already in the rear-view mirror.
To sum up, the fact that the US economy is in a slowdown and a state of uncertainty is pretty much obvious at this point. The key takeaway for readers is that stock prices are forward-looking and reflect the investors’ outlook for several quarters ahead. Once it becomes completely clear that calendar 2026 will be past the current tariff turmoil, the US stock market will very likely return to growth. It is therefore an opportune moment to look for the most profitable growth stocks to add in anticipation of a broad market melt-up.
A financial advisor wearing a suit, pointing to a graph demonstrating success and growth in the financial sector.
Our Methodology
To compile our list of most profitable growth stocks, we used a screener to identify stocks with at least 30% revenue CAGR in the last 5 years and a net profit margin of at least 20%. Then we included in the article the top 13 stocks with the highest net profit generated in the most recent fiscal year, ranked in ascending order. We also included the number of hedge funds that own each stock, as per Insider Monkey’s Q4 2024 database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
13. argenx SE (NASDAQ:ARGX)
Net Profit in the latest fiscal year: $0.83 billion
Revenue CAGR last 5 years: 261.74%
Number of Hedge Fund Holders: 47
argenx SE (NASDAQ:ARGX) is a biotechnology company based in the Netherlands that specializes in antibody-based therapies for severe autoimmune diseases. Its lead product is marketed as VYVGART and is approved in multiple countries for treating generalized myasthenia gravis and chronic inflammatory demyelinating polyneuropathy. The company’s growth story relies on the successful advancement of a pipeline of therapies targeting various autoimmune conditions.
The year 2024 was successful for argenx SE (NASDAQ:ARGX), with the company expanding its reach to over 10,000 patients globally across 3 approved indications. The company achieved several clinical milestones, including “empasiprubart” advancing to Phase III, following impressive preclinical data, and successfully moving “efgartigimod” into larger registrational studies in Sjogren’s disease and 3 subsets of myositis. The company’s commercial success was evident with product net sales reaching $737 million for Q4 and $2.2 billion for the full year, representing 29% QoQ growth and 98% growth YoY.
Looking ahead to 2025, argenx SE (NASDAQ:ARGX) will mark its first year as a profitable company, reflecting its commercial success and disciplined execution. The company is advancing an ambitious clinical program with 10 Phase III studies and 10 proof-of-concept studies across “efgartigimod”, “empasiprubart,” and ARGX-119. The anticipated launch of the prefilled syringe, which opens the door for self-administration in the US, is expected to be a key growth driver in 2025. ARGX maintains a strong financial position with a cash balance of $3.4 billion at year-end, further reinforcing its position as one of the most profitable stocks on our list.
12. Genmab A/S (NASDAQ:GMAB)
Net Profit in the latest fiscal year: $1.19 billion
Revenue CAGR last 5 years: 35.73%
Number of Hedge Fund Holders: 19
Genmab A/S (NASDAQ:GMAB) is a Danish company that develops advanced antibody-based medicines, mainly for cancer and serious diseases. It has helped create some approved treatments like DARZALEX for multiple myeloma, Kesimpta for multiple sclerosis, and Tivdak for cervical cancer, often working with large pharma partners. GMAB ranked third on our recent list of 8 Most Undervalued Healthcare Stocks to Buy According to Analysts.
Genmab A/S (NASDAQ:GMAB) delivered exceptionally strong financial performance in 2024, achieving 31% total revenue growth and 26% operating profit growth, driven by the success of their commercialized medicines, including EPKINLY and Tivdak. The company made significant strategic investments, including the $1.8 billion acquisition of ProfoundBio and a $500 million share buyback, while maintaining a strong cash position of nearly $3 billion. Its recurring revenues grew by 35%, representing 91% of total revenue in 2024, up from 88% in 2023, demonstrating an improving quality in their revenue profile.
Looking ahead to 2025, Genmab A/S (NASDAQ:GMAB) is focusing on executing its late-stage pipeline development, particularly with EPKINLY, Rina-S, and “acasunlimab”. The company anticipates three potentially significant pivotal readouts for EPKINLY by the end of 2026, including trials in frontline diffuse large B-cell lymphoma and second-line follicular lymphoma, which could support regulatory filings and drive meaningful revenue growth. For 2025, management projects revenue growth of 12% at the midpoint, with operating profit expected to grow by 16% to more than $1.1 billion, while maintaining disciplined investments in their priority programs. The optimistic guidance goes in line with the strong historical revenue growth momentum, which makes GMAB one of the most profitable stocks to buy now.
11. Coterra Energy Inc. (NYSE:CTRA)
Net Profit in the latest fiscal year: $1.25 billion
Revenue CAGR last 5 years: 49.40%
Number of Hedge Fund Holders: 48
Coterra Energy Inc. (NYSE:CTRA) is an energy company engaged in the exploration, development, and production of oil, natural gas, and natural gas liquids. The company operates in three key regions: the Permian Basin in West Texas and Southeast New Mexico, the Marcellus Shale in Northeastern Pennsylvania, and the Anadarko Basin in Oklahoma.
Coterra Energy Inc. (NYSE:CTRA) delivered exceptional fourth quarter results, with production levels exceeding guidance for both oil and natural gas while maintaining capital expenditures near the low end of guidance. The company returned 89% of its free cash flow in 2024 through dividends and share repurchases, demonstrating strong shareholder returns. For 2025, after successfully closing the Franklin Mountain and Avant acquisitions in January, CTRA plans to run a consistent and highly capital-efficient program across its three operating regions, with expected capital spending between $2.1 billion and $2.4 billion.
The company has demonstrated significant operational improvements, particularly in the Marcellus, where it achieved a record low cost structure of $800 per foot, and in the Permian, where costs are projected to be $960 per foot, down 6% from 2024. Looking ahead, Coterra Energy Inc. (NYSE:CTRA) expects to prioritize deleveraging in 2025 with plans to repay $1 billion in term loans while maintaining its commitment to return 50% or more of annual free cash flow to shareholders through base dividends and share repurchases. CTRA’s updated three-year outlook positions it for industry-leading profitable growth, with projected oil volume growth of at least 5%, making it one of the most profitable growth stocks to consider.
