Growth stocks can do wonders for your investment portfolio if chosen right.
They can offer you the amazing ability to compound your wealth if held over years or even decades.
Of course, it is important to choose the right growth stocks that can demonstrate consistent growth over the years.
Attributes to look for include a strong market position, a long track record of performance, and being in an industry with sustainable and long-term growth.
We introduce four US growth stocks that have the potential to deliver solid returns to your investment portfolio.
Snowflake (NYSE: SNOW)
Snowflake operates a data cloud platform that customers use to collate and share data to gain insights and perform analysis.
The company’s platform helps to deliver a uniform experience that covers multiple clouds and geographies.
For its fiscal 2024 (FY2024) ending 31 January 2024, Snowflake’s revenue jumped 36% year on year to US$2.8 billion.
Its gross profit climbed 41.5% year on year to US$1.9 billion.
The cloud operator generated a positive free cash flow of US$779 million, 57% higher than the US$496.5 million churned out a year ago.
Snowflake’s total customers rose 22% year on year from 7,744 to 9,437, with 691 of these customers belonging to the Forbes Global 2000 list.
Customers delivering more than US$1 million in product revenue also jumped 39% year on year to 461.
For the first quarter of FY2025, Snowflake expects its product revenue to grow by 26% to 27% year on year.
Fortinet (NASDAQ: FTNT)
Fortinet is a cybersecurity company with an extensive portfolio of more than 50 enterprise-grade products.
For 2023, the company saw its revenue rise 20.1% year on year to US$5.3 billion while operating profit climbed 28% year on year to US$1.2 billion.
The cybersecurity specialist’s net profit surged by 34% year on year to US$1.1 billion.
The business also generated a positive free cash flow of US$1.7 billion, 19.5% higher than the US$1.4 billion generated in the prior year.
Fortinet continued to see the size of its deals grow with deals exceeding US$10 million more than doubling year on year to 13.
The company expects its 2024 revenue to come in between US$5.175 billion to US$5.185 billion.
At the midpoint, this represents a year-on-year growth of around 8.7%.
Fortinet believes that it has a total addressable market (TAM) of US$150 billion this year which will grow to US$208 billion by 2027, giving it ample opportunities to grow its business further.
Datadog (NASDAQ: DDOG)
Datadog offers an observation and security platform for cloud applications.
Its platform integrates and automates a host of services to provide real-time, unified security and observability for its customers’ technology stack.
Datadog’s revenue for 2023 improved by 27.1% year on year to US$2.1 billion while its gross profit climbed 29.4% year on year to US$1.7 billion.
The software-as-a-service company also saw its 2023 free cash flow surge 69% year on year to US$597.5 million.
Total customers increased from around 23,200 in 2022 to 27,300 in 2023 and was a significant increase from just 7,676 customers back in 2018.
In addition, customers with annual recurring revenue (ARR) of more than US$1 million also rose 25% year on year to 396.
The proportion of customers using six or more products has more than doubled from 10% in 2021 to 22% in 2023, while those using eight or more products jumped more than fourfold from 2% to 9% over the same period.
Datadog estimates that the cloud security market size is around US$21 billion today but is projected to grow at 16% per annum to reach more than US$35 billion by 2027.
Intuit (NASDAQ: INTU)
Intuit is a software company that offers a wide range of taxation and accounting software such as TurboTax, Credit Karma, and Quickbooks to its customers.
For the first half of fiscal 2024 (1H FY2024) ending 31 January 2024, Intuit’s revenue increased by 13% year on year to US$6.4 billion.
Operating profit soared by 95.4% year on year to US$676 million while net profit more than doubled year on year from US$208 million to US$594 million.
The business also generated a positive free cash flow of US$369 million.
Intuit has a bold vision to double households’ savings rates through the usage of its software by 2030.
It also plans to acquire more than 200 million customers and accelerate its revenue growth.
The company currently has around 100 million customers.
Intuit’s core TAM stood at US$81 billion and if the company expands globally, its TAM will expand to US$312 billion of which it has captured just a 5% market share.
This market size implies that Intuit has a significant opportunity to grow its business further.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
