Growth stocks have consistently outperformed the broader markets, at least for the past two decades. Also, growth stocks generally do not pay dividends to investors. That’s due to the fact that these companies usually make the decision to reinvest any earnings back into the company to help speed up its growth. Back in February when the markets were hitting new highs, top growth stocks to watch were performing pretty well. Then the coronavirus hit, and these stocks got rocked with the rest of the market. Now, from March’s lows we’ve seen some of the best growth stocks to buy have massive rallies that are still continuing in the stock market today. Top growth stocks this year like Shopify (SHOP Stock Report) and Roku Inc. (ROKU Stock Report) have shown triple-digit gains for investors since March lows of 216.66% and 339.14%, respectively.
There are a number of other top growth stocks that are experiencing explosive growth like the companies mentioned above in the stock market this year. Even though these stocks have had a huge reward for investors, be mindful that we’ve experienced 10 years of worth of gains in a little over 6 months. There is the potential of a pullback. It’s not uncommon to see top growth stocks pullback 20% to 40%+. The trends of the best growth stocks to buy can include improving fundamentals and a history of bullish trading activity in the market.
Growth stocks can be in any industry. We commonly see them in industries such as technology and biotechnology. As you look deeper, you may identify their competitive advantages and future addressable markets. That way, you could potentially increase your chance of picking the best growth stocks. With all that being said, let’s take a look at 3 top growth stocks to watch next week.
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First up on the list, is Unity Software Inc. (U Stock Report). Unity stock has been one of the best growth stocks to buy since its IPO in September. U stock price has increased by 78.63% closing Friday’s trading session at $116.31 a share. Unity Software is the world’s leading platform for creating and operating interactive, real-time 3D content. Last year, more than half of the top 1000 games in Apple’s App Store and Google’s Play Store were built using Unity’s software platform. The company currently supports more than 90% of the top gaming companies globally. Some of Unity’s biggest clients are Electronic Arts (EA Stock Report) and Tencent (TCEHY Stock Report).
This month, Unity reported its third-quarter earnings. The company reported revenues of $200.8 million, resulting in a 53.3% increase year-over-year. They also reported a dollar-based net expansion rate of 144% in Q3. Unity has forecasted that its revenue numbers for Q4 will be a projected $200M to $204M, rounding out its 2020 fiscal year outlook to revenues between $752 million to $756 million.
“We are very pleased to start our public company journey with such a strong quarter,” stated Kim Jabal, Chief Financial Officer, Unity. “Revenue of $200.8 million in the third quarter, up 53.3% year-over-year, reflects the resilience of our business model and strong execution across our operational teams and geographies. Our robust growth has reinforced our confidence in the fundamental strength of our business model, and in the long-term opportunity that we see ahead.”
The question becomes, do you think the gaming industry will continue to grow shareholders’ wealth in the market like it has this year? If you like gaming and investing, do you think Unity is a top growth stock to buy for your long-term portfolio?Best Growth Stocks To Buy [Or Avoid] Now: Pinterest
Next up on the list of the best growth stocks to watch is Pinterest (PINS Stock Report). The tech stock has seen a lot of success in the stock market in 2020. Pinterest is a social media company that provides image sharing and social media services. Since the start of the COVID-19 pandemic,k the San Francisco-based company has been of the top beneficiaries of lockdowns and people staying at home more. Since the market crash in March, PINS stock has had a massive rally of 552.97% from lows of $10.10 on March 18th to closing Friday’s trading session at $65.95 a share.
In late October Pinterest announced its third-quarter financials and beat analyst and investor estimates. The company reported revenues of $443 million, which represented a 58% increase year-over-year. This came with a jump in global monthly active users of 37% to 442 million. This is expected as people are spending more time on their computers during the COVID-19 pandemic. From starting a new hobby to learning new food recipes, Pinterest has become the social media platform for creative inspiration. Pinterest allows its creators to share their ideas with people across the globe.
Pinterest Chief Financial Officer, Todd Morgenfield mentioned, “The strong momentum our business experienced in July continued throughout the rest of the third quarter. We’re extremely pleased with the broad-based strength of our business, driven by recovering advertiser demand as well as positive returns from our investments in advertiser products and international expansion.”
The company also provided its fourth-quarter guidance, and they believe they will grow nearly 60% year-over-year. Considering PINS’s impressive growth since March, can PINS stock continue its momentum this upcoming week?Best Growth Stocks To Buy [Or Avoid] Now: NIO Inc.
The last growth stock to watch is Chinese electric vehicle maker NIO, Inc. (NIO Stock Report). Nio has been one of the best performing electric vehicle stocks in the stock market this year. Shares of NIO stock are up an astounding 1202.41% year-to-date. On January 2nd, 2020 NIO was trading at a range of $3 a share. On Friday, NIO stock closed at $48.45. The company is a premium electric vehicle car maker that specializes in the SUV market.
Just last week NIO reported its third-quarter 2020 earnings. The company beat third-quarter expectations. NIO reported a loss of 12 cents per share from $667 million in sales. That represents a 146% increase in sales year-over-year. The estimates from Wall Street analysts was a loss of 19 cents per share and $663 million in sales. The company also reported that it anticipates that in the fourth quarter of this year they will deliver between 16,500 and 17,000 electric vehicles. This news comes after the company reported in October that they doubled its vehicle deliveries to new monthly highs.
“With another quarter of record-high deliveries in the third quarter of 2020, plus further improvements in average selling price, material cost, and manufacturing efficiency, our vehicle margin increased to 14.5%. Additionally, we achieved positive cash flow from operating activities for the second sequential quarter,” stated NIO Chief Financial Officer, Steven Wei Feng.
With Tesla (TSLA Stock Report) recently being added to the S&P 500, is NIO a top competitor to TSLA? I guess only time will tell. But one thing is certain, NIO continues to be one of the best growth stocks to watch in the stock market today.