5 Best Growth Stocks Under $25

In this article, we discuss 5 best growth stocks under $25. If you want to read our discussion on the performance of growth stocks, head over to 12 Best Growth Stocks Under $25. 

5. The Goodyear Tire & Rubber Company (NASDAQ:GT)

Number of Hedge Fund Holders: 27

Share Price as of July 26: $15.99

P/E Ratio as of July 26: 1,167.52

The Goodyear Tire & Rubber Company (NASDAQ:GT) is involved in the development, manufacturing, and sale of tires and related products and services. The company offers a wide range of tires for automobiles, trucks, buses, aircraft, motorcycles, and industrial equipment. The Goodyear Tire & Rubber Company (NASDAQ:GT) is one of the best growth stocks to invest in. On July 26, in response to the announcement of new board additions and an operational review committee, Deutsche Bank included The Goodyear Tire & Rubber Company (NASDAQ:GT) in its short-term Catalyst Call Buy List.

According to Insider Monkey’s first quarter database, The Goodyear Tire & Rubber Company (NASDAQ:GT) was part of 27 hedge fund portfolios, compared to 25 funds in the prior quarter. Cliff Asness’ AQR Capital Management is the largest stakeholder of the company, with 3.65 million shares worth $39.5 million. 

Here is what ClearBridge Small Cap Value Strategy has to say about The Goodyear Tire & Rubber Company (NASDAQ:GT) in its Q3 2022 investor letter:

“We exited a number of stocks during the period, including Goodyear Tire & Rubber (NASDAQ:GT). We sold our position in Goodyear due to the cavalcade of concerns including the company’s elevated debt levels, inflationary pressures from higher input prices, continued manufacturing challenges in the auto industry and complications with the company’s manufacturing volume. With substantial exposure to the automotive industry through other portfolio holdings, we elected to consolidate our exposure within those higher-conviction holdings.”

4. Sunrun Inc. (NASDAQ:RUN)

Number of Hedge Fund Holders: 27

Share Price as of July 26: $19.86

P/E Ratio as of July 26: 198.45

Next on our list of the best growth stocks is Sunrun Inc. (NASDAQ:RUN), a California-based company providing residential solar energy systems in the United States. According to Morgan Stanley analyst Andrew Percoco, Sunrun Inc. (NASDAQ:RUN) will likely reach the midpoint of its target for 270-290 MW installations in Q2. Additionally, Percoco noted a positive update on the demand outlook for Sunrun Shift, which could lead to increased market share in California and potentially result in a positive revision of the full-year guidance. Morgan Stanley named Sunrun Inc. (NASDAQ:RUN) as one of the top solar plays ahead of the Q2 earnings season.

According to Insider Monkey’s first quarter database, 27 hedge funds were bullish on Sunrun Inc. (NASDAQ:RUN), compared to 39 funds in the earlier quarter. William B. Gray’s Orbis Investment Management is the leading stakeholder of the company, with 13.16 million shares worth $265.3 million.

Here is what Horizon Kinetics has to say about Sunrun Inc. (NASDAQ:RUN) in its Q2 2021 investor letter:

“What this table did not cover is valuation. What’s expensive, what’s cheap? A good business that is too expensive is not a good investment. The most expensive business on the table is Sunrun. Sunrun is the nation’s largest residential rooftop solar panel system seller/installer. Sunrun’s valuation might also shed Thumbnail valuation.

To start at the top of the income statement, Sunrun shares trade at 10.3x revenues. The most profitable company in the S&P 500, Microsoft, trades at 13x revenues. Sunrun operates at a loss. Obviously, not only is tremendous growth anticipated, but tremendous profitability, too.

Let’s simply accept that investors have correctly anticipated Sunrun’s future success and make that the starting point for a valuation exercise.

If, 10 years from now, Sunrun is ultimately valued at 25x net income, and if today’s $9.5 billion valuation is appropriate, that would require $380 million of net income ($9,500 million ÷ 25).

Let’s say Sunrun will have the same net profit margin as the average S&P 500 company, which is 10%. That means it would need $3,800 million of sales to generate that level of earnings ($380 mill ÷ 10%).

Since sales are now $920 million, they would have to rise by 4.1x in the next 10 years. That would require annual sales growth of 15.2%. (Click here to read full text)

3. StoneCo Ltd. (NASDAQ:STNE)

Number of Hedge Fund Holders: 32

Share Price as of July 26: $13.20

P/E Ratio as of July 26: 1,320.50

StoneCo Ltd. (NASDAQ:STNE) is one of the best growth stocks to invest in. StoneCo Ltd. (NASDAQ:STNE) is a Brazil company that offers financial technology and software solutions to merchants and integrated partners. Its services enable electronic commerce transactions across various channels, including in-store, online, and mobile platforms. On May 17, StoneCo Ltd. (NASDAQ:STNE) reported a Q1 non-GAAP EPS of R$0.73 and a revenue of R$2.71 billion, up 30.9% year-over-year. In Q2 2023, total revenue and income are projected to exceed R$2,875 million, representing a year-over-year growth rate of over 24.8%.

According to Insider Monkey’s first quarter database, 32 hedge funds were bullish on StoneCo Ltd. (NASDAQ:STNE), compared to 35 funds in the earlier quarter. Steve Cohen’s Point72 Asset Management is the leading stakeholder of the company, with 12.2 million shares worth $116.6 million.

Nordstern Capital made the following comment about StoneCo Ltd. (NASDAQ:STNE) in its Q1 2023 investor letter:

“StoneCo Ltd. (NASDAQ:STNE): (STNE, share price increased + 1% in 1Q 2023)

The card association in Brazil have indicated that the industry should grow between 14% and 18% this year. And we expect to continue to gain market share.” – Thiago dos Santos Piao, Director and former CEO StoneCo Ltd

STNE’s transformation is progressing well. New key personnel have joined, the board and management have strengthened. Cash flows are growing, margins are increasing, the client base and market share keep expanding. The company is all set to restart its lending business in the second half of 2023.

In our view, despite all the changes, STNE still offers best-in-class service coupled with lower pricing than the industry and continues to drive high customer satisfaction…” (Click here to read the full text)

2. ZoomInfo Technologies Inc. (NYSE:ZI)

Number of Hedge Fund Holders: 40

Share Price as of July 26: $25.34

P/E Ratio as of July 26: 101.38

ZoomInfo Technologies Inc. (NYSE:ZI) offers a go-to-market intelligence and engagement platform for sales and marketing teams worldwide. Their cloud-based platform provides information on organizations and professionals, enabling users to identify target customers, obtain predictive lead and company scoring, monitor buying signals, engage through automated sales tools, and track progress throughout the deal cycle. ZoomInfo Technologies Inc. (NYSE:ZI) is one of the best growth stocks to invest in.

On June 28, Needham initiated coverage of ZoomInfo Technologies Inc. (NYSE:ZI) with a Buy rating and a $35 price target. To accelerate growth in the near term, Needham suggests focusing on selling advanced functionality modules and expanding into new industry verticals beyond software and business services, which currently comprise 66% of total revenue.

According to Insider Monkey’s first quarter database, 40 hedge funds were bullish on ZoomInfo Technologies Inc. (NYSE:ZI), compared to 31 funds in the last quarter. Mick Hellman’s HMI Capital is the leading stakeholder of the company, with 8.16 million shares worth $201.8 million.

Baron Asset Fund made the following comment about ZoomInfo Technologies Inc. (NASDAQ:ZI) in its Q1 2023 investor letter:

“Within Communication Services, lower exposure to this top performing sector coupled with the underperformance of marketing solutions provider ZoomInfo Technologies Inc. (NASDAQ:ZI) hampered relative results. ZoomInfo’s shares declined as the broader software and technology spending environment, to which the company is disproportionately exposed, continued to weaken. We are closely monitoring its customers’ spending patterns.”

1. Coupang, Inc. (NYSE:CPNG)

Number of Hedge Fund Holders: 47

Share Price as of July 26: $17.21

P/E Ratio as of July 26: 143.29

Coupang, Inc. (NYSE:CPNG) operates an e-commerce business in South Korea, utilizing mobile applications and websites. The company has two main segments – Product Commerce and Developing Offerings. Coupang, Inc. (NYSE:CPNG) is one of the best growth stocks to monitor. On May 9, the company reported a Q1 GAAP EPS of $0.05, in line with analysts’ estimates. Revenue for the period increased 13.3% year-over-year to $5.8 billion, outperforming Wall Street estimates by $160 million. Gross profit in Q1 2023 reached a record $1.4 billion, indicating a year-over-year increase of 36% and net income came in at $91 million, an improvement of $300 million compared to last year.

According to Insider Monkey’s first quarter database, 47 hedge funds were bullish on Coupang, Inc. (NYSE:CPNG), compared to 49 funds in the prior quarter. Lee Ainslie’s Maverick Capital is the largest stakeholder of the company, with 74.2 million shares worth $1.18 billion. 

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out 12 Best Solar Energy and Battery Stocks To Buy Now and Lee Ainslie: Washington Commanders and Other Investments.