In this article, we will take a detailed look at Top 10 Stocks to Buy According to 12 West Capital Management.
Joel Ramin founded 12 West Capital Management in August 2011, establishing it as a New York-based hedge fund specializing in global investments across equities, equity-related instruments, and credit securities. Prior to launching 12 West, Ramin worked as an analyst at Bridger Capital, gaining experience in both long equity positions and short-selling strategies. Currently, he serves as the firm’s Managing Member and Portfolio Manager, overseeing investment decisions and advisory services for institutional investors in the United States.
12 West Capital Management focuses on providing tailored investment management solutions, leveraging a research-driven approach to identify opportunities across various markets. The firm actively engages in both long-term and short-term investments, aiming to maximize returns through strategic asset allocation and risk management. Its expertise spans multiple asset classes, allowing it to adapt to changing market conditions while delivering value to its clients.
Joel Ramin holds a degree from the McIntire School of Commerce, where he completed his undergraduate studies in finance in 2000. His background in finance and investment, combined with his experience at Bridger Capital, has shaped his approach to portfolio management at 12 West Capital. Under his leadership, the firm has built a reputation for its disciplined investment strategies and commitment to generating long-term growth for its investors.
According to its most recent 13F filing for the fourth quarter of 2024, 12 West Capital Management reported nearly $954.6 million in managed 13F securities, with its top 10 holdings accounting for a hefty 90.75% of its portfolio.
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Our Methodology
The stocks discussed below were picked from 12 West Capital Management’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
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).
Top 10 Stocks to Buy According to 12 West Capital Management
10. Grocery Outlet Holding Corp. (NASDAQ:GO)
Number of Hedge Fund Holders as of Q4: 33
12 West Capital Management’s Equity Stake: $37.47 Million
Grocery Outlet Holding Corp. (NASDAQ:GO) is a US-based discount retailer specializing in supermarket locations that offer name-brand and private-label products at reduced prices, including overstocked and closeout items. The company recently released its financial results for the fourth quarter and fiscal year 2024 while also unveiling a restructuring plan aimed at enhancing long-term profitability and cash flow.
During the fourth quarter, Grocery Outlet Holding Corp. (NASDAQ:GO) initiated a restructuring strategy designed to optimize store growth and reduce costs. This plan involves terminating leases for unopened stores in underperforming locations, canceling certain warehouse projects, and reducing its workforce. The company expects to complete these actions by mid-2025, with estimated costs ranging from $52 million to $61 million, of which $36 million to $45 million will be in cash expenditures.
For the fourth quarter, net sales rose 10.9% year-over-year to $1.10 billion, with comparable-store sales increasing by 2.9%. Grocery Outlet Holding Corp. (NASDAQ:GO) reported a net income of $2.31 million, or $0.02 per diluted share, compared to $14.1 million, or $0.14 per share, in the prior year. Adjusted net income reached $14.5 million, or $0.15 per adjusted diluted share, compared to $18.2 million, or $0.18 per share, in Q4 2023. Adjusted EBITDA increased by 12.5% to $57.2 million, representing 5.2% of net sales.
For the full fiscal year 2024, net sales increased 10% to $4.37 billion, driven by new store openings and a 2.7% rise in comparable-store sales, supported by a 4.2% increase in transactions. Gross profit grew 6.5% to $1.32 billion, though gross margin declined by 110 basis points to 30.2%, largely due to higher inventory shrinkage related to system conversion issues.
During the quarter, total transactions increased by 3%, while the average transaction size remained flat. Grocery Outlet Holding Corp. (NASDAQ:GO) opened five new stores and closed one, ending 2024 with 533 locations across 16 states. Board Chairman Lindberg introduced the new President and CEO Jason Potter, who most recently served as the CEO of The Fresh Market. Lindberg expressed confidence in Potter’s leadership and ability to create long-term value for shareholders.
9. Repligen Corporation (NASDAQ:RGEN)
Number of Hedge Fund Holders as of Q4: 34
12 West Capital Management’s Equity Stake: $35.53 Million
Founded in 1981, Repligen Corporation (NASDAQ:RGEN) is a life sciences company specializing in bioprocessing technology that is headquartered in Waltham, Massachusetts. The company reported revenue of $168 million for the fourth quarter of 2024, showing a slight increase from $167 million in the same period the previous year. Its full-year revenue reached $634 million, up from $632 million in 2023. However, Repligen faced financial challenges, posting a net loss of $34 million in Q4 2024, compared to a $16 million loss in Q4 2023. Adjusted net income for the quarter also declined to $25 million from $27 million in the prior year.
The company’s financial performance showed a decrease in profitability, with gross profit for Q4 2024 at $39 million, down significantly from $78 million in Q4 2023. Adjusted gross profit was $85 million, compared to $87 million the previous year. Additionally, Repligen Corporation (NASDAQ:RGEN) reported an operating loss of $37 million for the fourth quarter, in contrast to an operating income of $10 million in Q4 2023. Despite these setbacks, President and CEO Olivier Loeillot expressed optimism, highlighting 13% revenue growth in Q4 2024. He emphasized strong order momentum in the second half of the year, reinforcing confidence in the company’s 2025 outlook.
Looking ahead, Repligen Corporation (NASDAQ:RGEN) projects total revenue between $685 million and $710 million for 2025, reflecting anticipated growth of 8% to 12%. The company expects non-COVID revenue to increase by 10% to 14%, with adjusted EBITDA margins ranging between 20% and 21%. This forecast does not account for potential acquisitions or currency fluctuations. On March 18, Evercore ISI initiated coverage on Repligen Corporation (NASDAQ:RGEN), assigning an In Line rating and setting a $155 price target. Analysts recognize Repligen as a key player in the bioprocessing sector, with a current market capitalization of $8.58 billion and stock trading at $152.81, with projected targets ranging from $155 to $225.
The Brown Capital Management Small Company Fund stated the following regarding Repligen Corporation (NASDAQ:RGEN) in its Q3 2024 investor letter:
“Repligen Corporation (NASDAQ:RGEN) is a life-sciences company that develops and manufactures products used throughout the complex process of making biological drugs, helping its customers increase efficiency and reduce costs. Toward the end of 2023, a year in which Repligen’s revenue declined 20%, there were some positive signs suggesting that demand might recover in 2024, but that recovery has not yet occurred, causing the stock price to decline 17% year to date through Sept. 30. Repligen revenue declined 17% during the first quarter of 2024 and fell 3% in the second quarter. Management pointed to continued weakness among CDMO (Contract Development and Manufacturing Organization) customers as the pace of R&D investments among smaller biotechs has slowed due to the tough funding environment from high interest rates. Analyzing the results of companies we own in this space, 10X Genomics (TXG), Cryoport (CYRX) and Bio-Techne (TECH), as well as peers like Thermo Fisher Scientific, Danaher and large CDMOs like Catalent and Lonza, it is evident that the slowdown in spending is an industry-wide phenomenon and not specific to Repligen.”
8. First Watch Restaurant Group, Inc. (NASDAQ:FWRG)
Number of Hedge Fund Holders as of Q4: 15
12 West Capital Management’s Equity Stake: $37.47 Million
First Watch Restaurant Group, Inc. (NASDAQ:FWRG) operates and franchises restaurants across the United States under the First Watch brand. Headquartered in Bradenton, Florida, the company specializes in breakfast, brunch, and lunch offerings. The company’s primary source of revenue comes from food and beverage sales at its restaurants, with additional income generated through franchise fees and royalties from its franchised locations.
For the quarter ending December 2024, First Watch Restaurant Group, Inc. (NASDAQ:FWRG) reported revenue of $263.29 million, reflecting a 7.6% increase from the same period the previous year and surpassing analysts’ expectations of $262.18 by 0.43%. The company reported earnings per share (EPS) of $0.01, compared to $0.04 a year ago. However, the EPS fell short of projections, coming in 50% lower than the anticipated $0.02 per share.
Key performance metrics reported by First Watch Restaurant Group, Inc. (NASDAQ:FWRG) included same-restaurant sales growth of -0.3%, slightly outperforming the analyst consensus of -0.5%. The total number of system-wide restaurants stood at 572, aligning with analyst estimates, while franchise-owned locations remained at 83 and company-owned restaurants slightly exceeded expectations at 489, compared to the projected 488. Franchise revenue for the quarter was reported at $2.67 million, reflecting a 25.8% decline year over year and missing the projected $2.76 million. Meanwhile, restaurant sales grew by 8.1% year over year, reaching $260.63 million, exceeding the forecasted $259.43 million.
Institutional interest in First Watch Restaurant Group, Inc. (NASDAQ:FWRG) has also grown, with Insider Monkey’s data showing that 15 hedge funds held stakes in the company at the end of Q4, representing a combined value of over $115.8 million, up from 6 funds in the previous quarter. The increasing hedge fund investments reflect strong institutional confidence, reinforcing First Watch Restaurant Group’s position as a top stock to buy according to 12 West Capital Management.
Ave Maria Focused Fund made the following comment about First Watch Restaurant Group, Inc. (NASDAQ:FWRG) in its Q2 2023 investor letter:
“The Fund added three new positions in the first half of the year. Two of them are high-growth restaurant chains. First Watch Restaurant Group, Inc. (NASDAQ:FWRG) is a daytime only concept that operates in the US. The second restaurant, Alsea Group, is owner of the master franchise agreement for Domino’s Pizza in Latin America, as well as Starbucks in Latin America, Spain, and France. Both restaurant groups exhibit strong same-store sales and store-count growth as well as high returns on invested capital.”
7. Datadog, Inc. (NASDAQ:DDOG)
Number of Hedge Fund Holders as of Q4: 83
12 West Capital Management’s Equity Stake: $38.08 Million
Datadog, Inc. (NASDAQ:DDOG) is a U.S.-based company specializing in observability solutions for cloud-scale applications. Its SaaS-based platform enables comprehensive monitoring of servers, databases, tools, and services, providing businesses with real-time insights. The company reported fourth-quarter revenue of $738 million, surpassing analyst expectations, along with adjusted earnings per share of $0.49. However, the company revealed that it had 462 customers with an annualized revenue run rate exceeding $1 million, falling short of analyst estimates by approximately 25 customers.
For the first quarter of 2025, Datadog, Inc. (NASDAQ:DDOG) anticipates revenue between $737 million and $741 million, with adjusted earnings per share ranging from $0.41 to $0.43, compared to analyst projections of $740.58 million in revenue and $0.46 per share. Despite its strong quarterly performance, the company’s guidance for both the first quarter and the full year fell below expectations, leading to a 9% stock decline on February 13. The company’s full-year guidance forecasts revenue between approximately $3.18 billion and $3.20 billion, with EPS projected between $1.65 and $1.70, significantly below the consensus estimate of $2.04 per share. Despite these conservative projections, Datadog has maintained its strong position in the cloud monitoring and security sector, outperforming competitors such as New Relic, Dynatrace, and Splunk.
Datadog’s success is fueled by its diverse product suite and ongoing innovation. Of its 23 products, 15 have already surpassed $10 million in annual recurring revenue, including offerings in cloud security, CI Visibility, and Cloud Cost Management. The company’s expansion into MongoDB monitoring, covering major database platforms like Postgres, MySQL, SQL Server, and Oracle, further solidifies its role as a comprehensive cloud solution provider. As of September 30, 2024, Datadog, Inc. (NASDAQ:DDOG) held $3.2 billion in cash and marketable securities, maintaining a strong financial position. Its non-GAAP operating margin improved to 25% in Q3 2024, reflecting operational efficiency. Looking ahead, the company projects Q4 2024 revenue between $709 million and $713 million, with full-year revenue expectations of $2.656 billion to $2.660 billion, reinforcing its growth trajectory and market leadership.
The Brown Capital Management Small Company Fund stated the following regarding Datadog, Inc. (NASDAQ:DDOG) in its Q3 2024 investor letter:
“Other examples of negative sentiment include portfolio companies that reported earnings that met or exceeded expectations, but only saw their share prices go up slightly, stay flat or even decline. For example, Datadog, Inc. (NASDAQ:DDOG) is a leading SaaS-based, information technology (IT)-monitoring and analytics software platform for developers, IT operations and business users. The platform automates the monitoring of infrastructure, applications databases, networks, logs and security. Datadog’s platform is differentiated by providing a unified view of these systems via a visual interface configured to the needs of each user (i.e., a single pane of glass). Datadog delivered solid operating results in the second quarter of 2024, reporting revenue growth of 27% and raising 2024 full year revenue, operating income and earnings guidance. Despite these solid fundamental results, Datadog’s share price was down 11.8% in the third quarter. We speculate that these market reactions are evidence of the negative environment for high-growth companies. For more, please see the Detractors section below.
Datadog, mentioned above, automates the monitoring of infrastructure, applications databases, networks, logs and security. The company delivered solid operating results in the second quarter of 2024, reporting revenue growth of 27% and raising guidance for 2024 full-year revenue, operating income and earnings. Datadog noted improving consumption and demand trends among its enterprise customers and stabilizing trends among its small and mid-sized customers. On its earnings call, Datadog management disputed that it has interest in large acquisitions, notwithstanding news articles on July 17 that Gitlab was seeking a buyer and Datadog is among the potential suitors. Despite solid fundamental results, Datadog’s share price underperformed in the third quarter of 2024. This may be due to its premium valuation and investor worries about Datadog’s ability to sustain its current strong revenue growth in a softer economic environment. We remain confident in Datadog’s ability to deliver durable growth over the long term. We believe Datadog has a massive and underpenetrated total addressable market that is growing about 10% annually. We also believe Datadog has a strong competitive positioning in infrastructure monitoring and is gaining market share.”
6. Kura Sushi USA, Inc. (NASDAQ:KRUS)
Number of Hedge Fund Holders as of Q4: 16
12 West Capital Management’s Equity Stake: $50.4 Million
Kura Sushi USA, Inc. (NASDAQ:KRUS) is a Japanese conveyor belt sushi restaurant chain founded in 1977. Headquartered in Sakai, Osaka, the company is the second-largest sushi chain in Japan, operating 543 locations in Japan, 56 in Taiwan, and 70 in the United States. It reported strong quarterly performance, with revenue increasing by 25.2%, driven by both store expansion and improved same-store sales. Comparable store sales rose by 1.8%, reversing a previous decline, and are expected to continue growing throughout the year. During the quarter, the company added six new locations, contributing to a total increase of 16 stores compared to the prior year, representing a 26% expansion. Given this pace, the company’s forecast of 15% fiscal-year growth appears conservative.
Although Kura Sushi USA, Inc. (NASDAQ:KRUS) faced some margin pressure due to expansion costs, the impact was less severe than anticipated. Operating efficiencies and controlled spending helped mitigate rising wages and inflation, leading to a significant reduction in corporate-level operating losses. The restaurant-level operating margin remained positive at approximately 18%, while overall operating losses declined to $1.5 million, nearly 50% lower than the previous year. While management’s guidance appeared cautious compared to analyst expectations, it reflects anticipated same-store sales growth alongside a store expansion rate exceeding 20%. This trajectory is expected to continue into 2025, reinforcing the company’s long-term growth strategy.
Kura Sushi USA, Inc. (NASDAQ:KRUS)’s balance sheet remains strong, with no long-term debt, a 50% increase in equity, and minimal liabilities: total liabilities stand at less than 0.8 times equity and 0.5 times assets. With only 70 locations in operation within the U.S., there is significant room for expansion, especially when compared to other fast-casual chains such as Chipotle Mexican Grill, which operates over 3,500 locations and continues to grow. Analyst sentiment following the Q1 earnings report has been positive, with multiple price target increases maintaining a “Moderate Buy” rating. These revised targets range from $90 to $120, with an average of approximately $103, representing a potential 15% to 25% upside.
Middle Coast Investing stated the following regarding Kura Sushi USA, Inc. (NASDAQ:KRUS) in its Q4 2024 investor letter:
“I wrote up Portillo’s briefly in Q3, where I had executed a pair trade with Kura Sushi USA, Inc. (NASDAQ:KRUS), buying Portillo’s shares and selling Kura Sushi short. That trade worked on a short-term basis, and while I unsuccessfully shorted Kura again (see below), I also decided to open a Portillo’s position.
I mentioned KRUS above. We closed our short the second time around at $90, shortly after the company’s Q3 which I thought was quite bad but didn’t really hit the stock. There’s no obvious catalyst to correct the company’s value, and I am probably missing the bull case. I only short in personal accounts.”
5. Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI)
Number of Hedge Fund Holders as of Q4: 25
12 West Capital Management’s Equity Stake: $63.17 Million
Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) specializes in providing essential products that support the development of drug therapies, novel vaccines, and diagnostics, while also advancing research on human diseases through proprietary technologies. Its client portfolio includes leading companies such as TriLink Biotechnologies, Glen Research, Cygnus Technologies, and Vector Laboratories, with expertise in biologics safety testing, nucleic acid production, and protein detection. Based in San Diego, California, Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) plays a critical role in the life sciences sector.
On March 18, 2025, the company released its financial results for Q4 2024 and the full year. CEO Trey Martin acknowledged that while the fourth-quarter revenue was within the projected range, challenges arose due to economic uncertainties and shifting customer spending priorities. However, he highlighted the company’s progress, including facility expansions, new product launches, and strategic acquisitions, which have reinforced Maravai’s long-term growth strategy. Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) remains committed to leveraging its unique technologies to support clients from early-stage discovery through commercialization.
The company’s fourth-quarter revenue totaled $56.6 million, marking a 23.7% year-over-year decline. Nucleic Acid Production revenue dropped 28.8% to $41.9 million, primarily due to the absence of large GMP orders seen in 2023 and weaker demand for research-related products. Biologics Safety Testing revenue fell 4.3% to $14.7 million, reflecting reduced bioprocessing market demand. Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) reported a net loss of $46.1 million and an adjusted EBITDA loss of $1.1 million, compared to a net loss of $110 million and adjusted EBITDA of $20.5 million in Q4 2023.
For the full year 2024, revenue declined 10.3% to $259.2 million. Nucleic Acid Production revenue was $196.3 million, down 12.6% due to decreased demand for research and discovery products. Biologics Safety Testing revenue slipped 2.1% to $62.8 million, mainly attributed to weaker demand in China’s bioprocessing sector. The company posted a net loss of $259.6 million and adjusted EBITDA of $35.9 million, compared to a net loss of $138.4 million and adjusted EBITDA of $65.3 million in 2023. Despite these financial headwinds, Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) continues to focus on strategic initiatives aimed at driving future growth.
4. Toast, Inc. (NYSE:TOST)
Number of Hedge Fund Holders as of Q4: 63
12 West Capital Management’s Equity Stake: $112.08 Million
Toast, Inc. (NYSE:TOST) is a Boston-based provider of cloud-based restaurant management solutions, specializing in an integrated point-of-sale (POS) system designed for the food service industry. Built on the Android platform, the company offers a range of hardware and software solutions, including the Flex terminal, Tap payment processor, Toast Hub, and receipt printer. Since launching in March 2020, Toast, Inc. (NYSE:TOST) has rapidly expanded, delivering digital tools that help streamline restaurant operations and improve overall efficiency.
For the fourth quarter of 2024, Toast reported record-breaking financial results, marking significant growth across key metrics. As of December 31, 2024, annual recurring revenue (ARR) increased by 34% year-over-year, reaching $1.6 billion. The number of restaurant locations using its platform expanded by 26% to approximately 134,000, while gross payment volume (GPV) grew 25% to $42.2 billion. Toast, Inc. (NYSE:TOST) also reported a notable turnaround in profitability, with GAAP income from operations reaching $32 million, a sharp contrast to the $56 million loss reported in the prior year. GAAP net income improved to $33 million, compared to a net loss of $36 million in the fourth quarter of 2023. Adjusted EBITDA surged to $111 million, nearly four times higher than the $29 million reported in the previous year’s quarter, reflecting strong operational efficiency.
For the full year 2024, Toast, Inc. (NYSE:TOST) maintained its growth momentum, with GPV rising by 26% to $159.1 billion. Subscription services and financial technology gross profit climbed 34% to $1.4 billion, while adjusted EBITDA rose significantly to $373 million from $61 million in 2023. Net cash from operating activities more than doubled to $360 million, while free cash flow increased to $306 million.
Looking ahead, Toast, Inc. (NYSE:TOST) expects continued strong performance in the first quarter of 2025, with non-GAAP gross profit projected to range between $385 million and $395 million, and adjusted EBITDA anticipated to be between $100 million and $110 million. With a growing customer base and continued financial strength, the company is well-positioned for long-term success in the restaurant technology sector and, therefore, is a top stock to buy according to 12 West Capital Management.
3. Roblox Corporation (NYSE:RBLX)
Number of Hedge Fund Holders as of Q4: 61
12 West Capital Management’s Equity Stake: $119.31 Million
Roblox Corporation (NYSE:RBLX), established in 2006 and based in San Mateo, California, has been a significant presence in the gaming industry, though it only recently gained widespread recognition. This rise in popularity led to a substantial increase in valuation, from $2.5 billion in 2018 to nearly $38 billion when it debuted on the New York Stock Exchange in 2021. In 2024, the company reported revenue of $3.6 billion, reflecting a 28.7% year-over-year increase. Additionally, it distributed $923 million to creators, reinforcing its commitment to user-generated content and the expansion of its virtual economy.
CEO David Baszucki emphasized the company’s focus on innovation and fostering connections within its digital ecosystem. He outlined Roblox Corporation (NYSE:RBLX)’s ambition to capture 10% of the global gaming content market while continuing investments in its virtual economy, AI-driven discovery, and platform security. Full-year revenue and bookings increased by 29% and 24%, respectively, underscoring the scalability and efficiency of Roblox’s business model.
Roblox Corporation (NYSE:RBLX) demonstrated strong financial growth in 2024, achieving $3.6 billion in revenue and $4.37 billion in bookings, reflecting 29% and 24% year-over-year increases respectively. Adjusted EBITDA reached $180.2 million while operating cash flow surged 79% to $822.3 million. Free cash flow also saw substantial growth, reaching $641.3 million, highlighting the company’s ability to generate liquidity while investing in expansion.
For 2025, Roblox Corporation (NYSE:RBLX) projects continued financial momentum, expecting full-year revenue between $4.25 billion and $4.35 billion, with bookings anticipated to range from $5.2 billion to $5.3 billion. The company forecasts a consolidated net loss between $995 million and $1.07 billion and an adjusted EBITDA between $190 million and $265 million. Operating cash flow is expected to fall between $1.05 billion and $1.11 billion, while free cash flow is projected to range from $800 million to $860 million. With strategic investments in technology, content development, and monetization, Roblox remains well-positioned for sustained long-term growth.
SaltLight Capital stated the following regarding Roblox Corporation (NYSE:RBLX) in its Q3 2024 investor letter:
“Roblox Corporation (NYSE:RBLX) has firmly established itself as the dominant player in user-generated gaming within Western markets. Meanwhile, Tencent has developed a similar ecosystem in China with its WeChat Mini-games platform. Owning both gives us a unique vantage point to assess the evolving landscape of user-generated gaming platforms globally.
At its recent investor day, Roblox set an ambitious target of reaching 10% of gaming content revenue, of which it estimates the total pool is around $180bn (for context, in the last twelve months, it made $4bn in bookings).
We think this will be a challenging target, but it will be positive for the business directionally. The reason is that Roblox has spent the last three years heavily investing in re-engineering its game platform to be high fidelity, performant and widely available across platforms. They also share economics with their creators to the point now that the absolute numbers in highly engaged games are enough to support a small game studio. The result is that the quality of games has materially improved, attracting additional engagement – particularly from older users…” (Click here to read the full text)
2. GDS Holdings Limited (NASDAQ:GDS)
Number of Hedge Fund Holders as of Q4: 32
12 West Capital Management’s Equity Stake: $133.27 Million
GDS Holdings Limited (NASDAQ:GDS) specializes in providing data center and IT infrastructure services, including colocation, managed hosting, and cloud solutions. The company generates revenue primarily through the development and operation of high-performance data centers across China and Southeast Asia, serving a diverse range of clients.
The company reported a 17.7% year-over-year increase in net revenue, reaching $422.6 million and surpassing the consensus estimate of $415.42 million. This growth was largely driven by the ongoing expansion of its data centers and business operations. Adjusted gross profit rose 20.4% year over year to $214.1 million, with the margin improving to 50.7% from 49.5% in the previous year.
Chairman and CEO William Huang noted that in China, GDS Holdings Limited (NASDAQ:GDS) continued executing its backlog while being selective with new orders. He also emphasized that the company’s recent rise in equity strengthens GDS’s position to capitalize on international growth opportunities. CFO Dan Newman highlighted that the $1 billion equity raise will fund GDS’s international expansion and enhance shareholder value.
The Chinese data center operator is reportedly pursuing a loan amounting to approximately $3.4 billion for its data center operations in Malaysia. If secured, this would mark GDS Holdings Limited (NASDAQ:GDS)’s largest loan to date and rank among the most significant financing deals within the data center sector by any borrower in Asia.
GDS Holdings Limited (NASDAQ:GDS) demonstrates strong growth potential with its revenue increase, driven by expanding data center operations in China and Southeast Asia. Its equity rise supports ambitious international expansion, positioning the company for long-term profitability, making it second on the list of top stocks to buy according to 12 West Capital Management.
1. Shake Shack Inc. (NYSE:SHAK)
Number of Hedge Fund Holders as of Q4: 43
12 West Capital Management’s Equity Stake: $228.98 Million
Shake Shack Inc. (NYSE:SHAK) is a fast-casual restaurant chain based in New York City, known for its burgers, hot dogs, and frozen custard. It originated as a hot dog cart in Madison Square Park in 2001 and rapidly gained popularity, eventually expanding into a full-fledged restaurant. As one of the fastest-growing food chains in the country, Shake Shack went public in late 2014, pricing its initial public offering at $21 per share on January 29, 2015. Over the years, the company has significantly expanded its footprint by increasing its number of company-owned and franchised locations while maintaining strong brand recognition.
Shake Shack Inc. (NYSE:SHAK) recently reported its fourth-quarter earnings, posting adjusted earnings per share (EPS) of $0.26, surpassing analyst expectations of $0.16 by $0.10. The company generated $328.7 million in revenue for the quarter, slightly exceeding the consensus estimate of $325.3 million. Year-over-year, revenue grew by approximately 15%. Systemwide sales across both company-owned and franchised locations totaled $500.7 million, falling short of projections by about $1.5 million. Following the earnings report, Shake Shack Inc. (NYSE:SHAK)’s stock surged more than 9% on February 20. Despite a 9.58% decline over the past three months, the stock remains up by 16.08% over the last 12 months.
In its shareholder letter, the company highlighted its substantial growth, noting that it has expanded from 31 company-owned locations in 2015 to nearly 330 today. Shake Shack Inc. (NYSE:SHAK) has now revised its long-term expansion goal, aiming for 1,500 company-owned restaurants, significantly higher than its previous target of 450. For the first quarter of 2025, the company projects revenue between $326.5 million and $330.9 million, slightly below the analyst consensus of $333.08 million. Its 2025 outlook includes revenue estimates ranging from $1.45 billion to $1.48 billion, with projected net income between $45 million and $60 million for the year, figures that align closely with market expectations. As investor confidence remains strong, the company’s stock has gained approximately 25% over the past year, reflecting its continued growth trajectory.
Overall, Shake Shack Inc. (NYSE:SHAK) ranks first on our list of top 10 stocks to buy according to 12 West Capital Management. While we acknowledge the potential for SHAK as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SHAK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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