In this article, we will take a look at the 15 best fast growth stocks to buy now. To skip our analysis of the recent trends, and market activity, you can go directly to see the 5 Best Fast Growth Stocks to Buy Now.
Vanguard Growth ETF is one of the most famous growth focused exchange traded funds with more than $191 billion net assets. It seeks to track the performance of a benchmark index that measures the investment return of large-capitalization growth stocks. The ETF primarily tracks large-cap growth stocks and has generated 46.6% return year-to-date as of December 22. The fund included 221 stocks as of November 30, with 21.1% average annual rate of growth in earnings over the past five years.
With improving macroeconomic conditions, the U.S. equity markets have been on one of its longest rallies that saw two major indices attaining their all-time highs. The S&P 500 Index has gone up 15.5% during the last 8 weeks. The Dow Jones Industrial Average hit an all-time high on December 13 while the NASDAQ-100 hit its own all-time high earlier this week on December 19. You can read more about the recent resurgence in the market in our recently published article.
Jurrien Timer, the director of global macro in Fidelity’s Global Asset Allocation Division, said the following about the market outlook in 2024:
“While we may be closing in on the darkest days of the year, in the markets it feels practically like spring—with stocks and bonds making strong gains in recent weeks as investors have welcomed the likely end of the Fed’s long rate-hiking campaign. For 2024, my base-case scenario is that this bull market will keep marching. As long as we continue to avoid a recession, the market could even reach new all-time highs.”
The companies on our list are arguably some of the fastest growing quality stocks trading on major stocks exchanges in the United States. Even though the companies on our list are spread across several continents, they have one thing in common: fast growth. Our list has an average sales growth rate of nearly 128% over the past five years which means that on average, the stocks on our list have more than doubled their revenue every year, a remarkable feat considering what kind of macroeconomic conditions the markets have recently gone through.
Our list includes companies from several sectors with the biggest share of companies either belonging directly to the technology sector or relying heavily on technology to provide their services. For instance, leading ecommerce companies, PDD Holdings Inc. (NASDAQ:PDD) and Mercadolibre, Inc. (NASDAQ:MELI), Brazilian fintech Nu Holdings Ltd. (NYSE:NU), and digital sports entertainment company, DraftKings Inc. (NASDAQ:DKNG), among others.
Methodology
To create our list of 15 best fast growth stocks to buy now, we used a stock screener to find stocks which have posted over 30% in sales growth over the past five years and over 30% sales growth quarter over quarter as of December 22. From this long list of stocks, we picked growth stocks with the highest number of hedge fund investors.
Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2023 was used to identify the number of hedge funds that hold stakes in each firm. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
15. Procore Technologies, Inc. (NYSE:PCOR)
Number of Hedge Fund Holders: 43
Miami, Florida-based Procore Technologies, Inc. (NYSE:PCOR) is a leading provider of construction management software. Its construction platform brings all stakeholders and processes onto a single platform including preconstruction, project execution, workforce management, and financial management.
On November 1, Procore Technologies, Inc. (NYSE:PCOR) released its financial results for Q3 2023. Its revenues increased by 33% y-o-y to $248 million, while it generated a net loss of $44 million compared to a net loss of $71 million. The normalized EPS for the quarter was recorded at $0.09, beating the consensus by $0.14.
As of Q3 2023, Procore Technologies, Inc. (NYSE:PCOR) shares were held by 43 of the 910 hedge funds tracked by Insider Monkey, with the total hedge fund holdings valued at $1.0 billion.
In its “Artisan Small Cap Fund” Q3 2023 investor letter, Artisan Partners, an investment management company, made the following comments about Procore Technologies, Inc. (NYSE:PCOR):
“Procore Technologies is a construction management software company with several products used for project management, quality and safety, and project financials. Its customers include building owners, general contractors and sub-contractors. Our conviction was increased after attending an analyst day in the quarter. Not only were we able to speak to customers at the event, but we got to test drive more of its software applications, including payments and invoicing. Construction is a cyclical industry. However, over time we believe the company’s profit cycle will become more stable than its end market given an ongoing digitalization trend within the construction industry, a diverse client base, large backlogs, high customer retention and the ability to cross-sell products that improve efficiency and margins. Furthermore, the company has access to a lot of data and is exploring AI as a way to help customers become more efficient, potentially enhancing its value proposition and pricing power.”
14. Roivant Sciences Ltd. (NASDAQ:ROIV)
Number of Hedge Fund Holders: 44
New York-based Roivant Sciences Ltd. (NASDAQ:ROIV) is a commercial-stage biopharmaceutical company focused on accelerating the development and commercialization of medicines. It targets a wide range of diseases including uterine fibroids, endometriosis, prostate cancer, Parkinson’s disease, diabetes, pulmonary arterial hypertension, and multiple rare and fatal pediatric conditions.
On October 23, Roivant Sciences Ltd. (NASDAQ:ROIV) announced entry into a definitive agreement under which Roche Holding AG (OTC:RHHBY) will acquire Telavant Holdings, Inc., owned by Roivant Sciences Ltd. (NASDAQ:ROIV) and Pfizer Inc. (NYSE:PFE) for a purchase price of $7.1 billion and a milestone payment of $150 million.
Roivant Sciences Ltd. (NASDAQ:ROIV) owns 75% of Telavant while Pfizer Inc. (NYSE:PFE) owns the remaining 25%. The agreement includes the development, manufacturing and commercialization rights in the US and Japan for RVT-3101, a novel TL1A directed antibody for people suffering from inflammatory bowel disease, including ulcerative colitis and Crohn’s disease.
As of Q3 2023, 44 of the 910 hedge funds tracked by Insider Monkey were long Roivant Sciences Ltd. (NASDAQ:ROIV) and held shares worth $3.2 billion. Daniel Gold’s QVT Financial held the most shares of the company with ownership of 11.5 million shares valued at $1.3 billion.
13. SentinelOne, Inc. (NYSE:S)
Number of Hedge Fund Holders: 45
Mountain View, California-based SentinelOne, Inc. (NYSE:S) is a leading provider of autonomous security solutions for endpoint, cloud, and identity environments. Its Singularity™ Platform detects, prevents, and responds to cyber-attacks at machine speed, empowering organizations to secure endpoints, cloud workloads, containers, identities, and mobile and network-connected devices.
On December 5, SentinelOne, Inc. (NYSE:S) released its financial results for the quarter ended October 31, 2023. Its revenue increased by 42% y-o-y to $164 million while its net loss decreased by 29% y-o-y to $70 million. Its normalized EPS of -$0.03 exceeded consensus estimates by $0.05.
Following the earnings release, TD Cowen analyst Shaul Eyal raised the price target for SentinelOne, Inc. (NYSE:S) shares to $30 from $20 and maintained an ‘Outperform’ rating for its shares.
Baron Funds, an investment management company, made the following comments about SentinelOne, Inc. (NYSE:S) in its “Baron Discovery Fund” Q3 2023 investor letter:
“SentinelOne has also leveraged its large security data set across customers to offer new products including cloud security (protecting virtual machines and applications running in the cloud), identity-based threat protection, and extended detection & response (collecting data from other sources like network scans and IT logs to provide a holistic security view). These emerging solutions represent more than a third of bookings, are growing faster than core endpoint protection, and drive much higher long-term contract values. As SentinelOne has scaled its business across these products, the company has delivered significant improvement in its free cash-flow (FCF) margins, which have expanded by an average of 24% year-over-year every quarter since becoming a public company. We expect the business to generate positive cash flow next year and healthy 20%-plus margins longer term. As the threat environment continues to get worse, with more frequent and severe ransomware attacks, heightened geopolitical tension, and increased sophistication of hackers, we see ample runway for growth through both new customer acquisition and existing customer expansion. The combination of resilient end-market demand, new product traction, and margin expansion should all bode well for the stock long term.”
12. Toast, Inc. (NYSE:TOST)
Number of Hedge Fund Holders: 46
Toast, Inc. (NYSE:TOST), based in Boston, Massachusetts, is a software company that provides a cloud based restaurant point of sale and management software system to run their business across point of sale, operations, digital ordering and delivery, marketing and loyalty, and team management.
On November 7, Toast, Inc. (NYSE:TOST) released its financial results for Q3 2023. Its revenues increased by 37% y-o-y to $1.0 billion, while net loss declined by 68% y-o-y to $31 million. The company also upgraded its full year outlook range for revenue to $3.83 billion to $3.86 billion and adjusted EBITDA to $38 million to $48 million.
As of Q3 2023, Toast, Inc. (NYSE:TOST) shares were held by 46 hedge funds with the total shares held by them valued at $1.6 billion. Mick Hellman’s HMI Capital was its largest hedge fund shareholder with ownership of 14.4 million shares valued at $269 million.
11. argenx SE (NASDAQ:ARGX)
Number of Hedge Fund Holders: 48
New York City-based argenx SE (NASDAQ:ARGX) is a global immunology company focused on translating immunology breakthroughs into a world-class portfolio of novel antibody-based medicines targeting severe autoimmune diseases.
On November 16, argenx SE (NASDAQ:ARGX) announced that the European Commission approved SC injectable VYVGART (efgartigimod alfa) as an add-on to standard therapy for the treatment of generalized myasthenia gravis in adult patients. VYVGART® is now approved for both intravenous and self-administered subcutaneous use in Europe.
argenx SE (NASDAQ:ARGX) was ranked 3rd on our list of 15 best fast growth stocks to buy now in terms of sales growth over the past five years. As of Q3 2023, the stock was held by 48 hedge funds with the total shares held by hedge funds valued at $2.3 billion.
In its Q3 2023 “Baron Health Care Fund” investor letter, Baron Funds made the following comments about argenx SE (NASDAQ:ARGX):
“In July, argenx reported positive data from a study of Vyvgart Hytrulo in adults with CIDP. The study met its primary endpoint demonstrating a significantly lower risk of relapse with Vyvgart Hytrulo versus a placebo. This positive data adds to the commercial opportunity for Vyvgart, which is in the early stages of commercial launch for the treatment of myasthenia gravis (MG). We estimate CIDP represents an additional $3 billion revenue opportunity. We believe Vyvgart and the subcutaneous version Vyvgart Hytrulo have the potential to generate at least $7 billion in peak sales in MG, CIDP, primary immune thrombocytopenia, and pemphigus vulgaris. Plus, the company is studying Vyvgart in other autoimmune diseases and the ultimate peak sales potential for the franchise could be much higher. We continue to believe argenx is a unique growth company with strong management.”
10. Inspire Medical Systems, Inc. (NYSE:INSP)
Number of Hedge Fund Holders: 49
Inspire Medical Systems, Inc. (NYSE:INSP) is a medical technology company focused on the development and commercialization of innovative and minimally invasive solutions for patients with obstructive sleep apnea. Its Inspire therapy is the first and only FDA-approved neurostimulation technology that provides a safe and effective treatment for moderate to severe obstructive sleep apnea.
On November 7, Medical Systems, Inc. (NYSE:INSP) released its financial results for Q3 2023 which showed nearly 40% y-o-y increase in its quarterly revenue to $153 million. Its normalized EPS of -$0.29 surpassed consensus estimates by $0.25.
Hedge funds are bullish about Inspire Medical Systems, Inc. (NYSE:INSP) shares as the number of hedge funds that own its shares has increased significantly from 35 in Q4 2022 to 49 in Q3 2023. These hedge funds together held shares worth $644 million according to Insider Monkey data. Steve Cohen’s Point72 Asset Management was its largest hedge fund shareholder with ownership of 0.88 million shares valued at $175 million.
9. Sarepta Therapeutics, Inc. (NASDAQ:SRPT)
Number of Hedge Fund Holders: 50
Cambridge, Massachusetts-based Sarepta Therapeutics, Inc. (NASDAQ:SRPT) is a global biotechnology company focused on the development of precision genetic medicine for rare diseases. Driven by its multi-platform precision genetic engine, the company currently has a pipeline of more than 40 programs in various stages of development across Duchenne muscular dystrophy (DMD) and limb-girdle muscular dystrophies (LGMDs), and other rare diseases.
The portfolio of Sarepta Therapeutics, Inc. (NASDAQ:SRPT) includes four FDA approved therapies including ELEVIDYS for treatment of DMD in pediatric patients, EXONDYS 51, VYONDYS 53, and AMONDYS 45.
On October 30, Sarepta Therapeutics, Inc. (NASDAQ:SRPT) announced topline results from its Phase 3 clinical study of ELEVIDYS in patients with DMD between the ages of 4 through 7 years. The company revealed that after 52 weeks, patients who underwent the therapy showed improved motor function in comparison to those who received placebos. Nevertheless, the trial results did not reach statistical significance and ultimately missed the primary objective of the study.
Following the announcement, Sarepta Therapeutics, Inc. (NASDAQ:SRPT) shares went significantly down and several analysts lowered their price targets and ratings for the shares. Morgan Stanley analyst Matthew Harrison lowered the price target to $146 from $183 but maintained an ‘Overweight’ rating for the shares, 54.43% more than the share price on December 22.
8. Zscaler, Inc. (NASDAQ:ZS)
Number of Hedge Fund Holders: 50
Based in San Jose, California, Zscaler, Inc. (NASDAQ:ZS) operates the world’s largest cloud security platform, protecting thousands of enterprises and government agencies from cyberattacks and data loss. Its flagship services, Zscaler Internet Access, and Zscaler Private Access, create fast, secure connections between users and applications.
On September 5, Zscaler, Inc. (NASDAQ:ZS) released its financial results for three months ended July 31, 2023. Its revenue increased by 43% y-o-y to $455 million and it reported a net loss of $31 million. The company generated a normalized EPS of $0.64 which was $0.15 more than the consensus estimates.
On November 16, Rosenblatt analyst Catharine Trebnick raised the price target for Zscaler, Inc. (NASDAQ:ZS) shares to $225 from $185 and maintained a ‘Buy’ rating. The price target represents a potential upside of 20.85% based on the share price on November 17.
As of Q3 2023, Zscaler, Inc. (NASDAQ:ZS) shares were held by 50 prominent hedge funds with the total value of shares held by hedge funds valued at $1.0 billion. Two Sigma Advisors was the largest hedge fund shareholder on record with ownership of 1.02 million shares valued at $159 million.
7. Nu Holdings Ltd. (NYSE:NU)
Number of Hedge Fund Holders: 50
São Paulo, Brazil-based Nu Holdings Ltd. (NYSE:NU) is one of the world’s largest digital financial services platforms, serving around 90 million customers across Brazil, Mexico, and Colombia.
On November 14, Nu Holdings Ltd. (NYSE:NU) released its financial results for Q3 2023. Its total revenue increased by 64% y-o-y to $2.1 billion, while it generated a net income of $303 million. Its normalized EPS of $0.07 surpassed consensus estimates by $0.01.
Following the earnings release, Susquehanna analyst James Friedman raised the price target for Nu Holdings Ltd. (NYSE:NU) shares to $11 from $10 and maintained a ‘Positive’ rating for its shares. The price target represents a potential upside of 33.82% based on the share price on December 22.
As of Q3 2023, 50 of the 910 hedge funds tracked by Insider Monkey owned shares of Nu Holdings Ltd. (NYSE:NU), valued at $3.6 billion. Its largest shareholder was Warren Buffett’s Berkshire Hathaway with ownership of 107 million shares valued at $777 million.
6. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Holders: 51
Based in Boston, Massachusetts, DraftKings Inc. (NASDAQ:DKNG) is a digital sports entertainment and gaming company with products that range across daily fantasy, regulated gaming, and digital media. It is the only U.S.-based vertically integrated sports betting operator.
On November 2, DraftKings Inc. (NASDAQ:DKNG) released its financial results for Q3 2023. Its revenue increased by 57% y-o-y to $790 million while it generated a net loss of $283 million.
Earlier this year in June, DraftKings Inc. (NASDAQ:DKNG) announced that it had submitted an indicative offer to acquire the U.S. business of PointsBet Holdings Ltd. for an all-cash purchase price of $195 million. The proposal represented a 30% premium to PointsBet’s existing agreement to sell the business to Fanatics Betting and Gaming. The company later announced that it is no longer pursuing the acquisition.
As of Q3 2023, DraftKings Inc. (NASDAQ:DKNG) shares were owned by 51 of the 910 hedge funds tracked by Insider Monkey, for a total value of $2.1 billion.
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Disclosure: None. 15 Best Fast Growth Stocks to Buy Now is originally published on Insider Monkey.
