Growth stocks are a great way to grow your investment portfolio to better prepare yourself for retirement.
When scouring the investment landscape for suitable growth stocks, it’s important to look for attractive attributes that can allow the company to do well in the long term.
These businesses should have a strong market position within their industry, possess a solid growth track record, and possess catalysts that can sustain growth in the medium term.
Here are four US growth stocks that satisfy the above criteria that you can consider adding to your buy watchlist.
Mercadolibre (NASDAQ: MELI)
Mercadolibre is the largest e-commerce and payment provider in the Latin America region.
The company makes use of technology to enable e-commerce and digital financial services for its customers.
Mercadolibre continued to deliver a robust set of earnings for the first half of 2024 (1H 2024).
Total revenue jumped 39% year on year to US$9.4 billion while operating profit increased by 15.4% year on year to US$1.3 billion.
Net profit surged 89% year on year to US$875 million.
The e-commerce player also generated a positive free cash flow of US$3.1 billion, 48% higher than the US$2.1 billion churned out a year ago.
The company’s operating metrics are also seeing a steady increase.
The number of fintech monthly active users (MAU) increased from 37.9 million in the second quarter of 2023 (2Q 2023) to 52 million in 2Q 2024.
The platform’s gross merchandise volume (GMV) increased 20.4% year on year to US$24 billion.
Both payment transactions and total payment volume (TPV) also improved year on year by 55.1% and 35%, respectively, to US$87.1 billion and 5.1 billion.
Over at its payment platform Mercado Pago, the assets under management nearly doubled year on year from US$3.6 billion in 2Q 2023 to US$6.6 billion in 2Q 2024.
Mercadolibre continues to grow the business and increase its income streams.
As an example, back in July, Mercado Ads partnered with Disney (NYSE: DIS) to serve programmatic video ads within the new ad-supported version of Disney+.
More external display and video partnerships should be in store soon for this division.
Salesforce (NYSE: CRM)
Salesforce is a leader in the customer relationship management (CRM) space and operates a software-as-a-service platform that provides its clients with the tools and analytics to help them to monitor leads, launch marketing campaigns, and conduct other activities.
The company reported a strong set of earnings for the first six months of fiscal 2025 (1H FY2025) ending 31 July 2024.
Revenue rose 9.5% year on year to US$18.5 billion with operating profit leaping 85% year on year to US$3.5 billion.
Net profit doubled year on year from US$1.5 billion to US$3 billion.
The CRM specialist also saw its free cash flow jump 40% year on year to US$6.8 billion for 1H FY2025.
Salesforce gave healthy guidance for FY2025 and projects that revenue will come in between US$37.7 billion to US$38 billion, representing a year-on-year growth of 8% to 9%.
The company’s remaining performance obligations (RPO) stood at US$26.5 billion, up 10% year on year.
From its Investor Day back in 2022, management identified a total addressable market of US$290 billion by 2026.
Adobe (NASDAQ: ADBE)
Adobe is a software company offering a platform with web design tools, photo manipulation, and video creation.
The company provides digital experiences through its cloud services Document Cloud, Creative Cloud, and Experience Cloud.
Adobe delivered a mixed set of earnings for the first nine months of fiscal 2024 (9M FY2024) ending 30 August 2024.
Revenue hit a record-high of US$15.9 billion and was up 10.7% year on year.
Operating profit, however, fell by 2.5% year on year to US$4.8 billion while net profit slipped by 1.7% year on year to US$3.9 billion.
Despite the slight decline in profits, Adobe still churned out a positive free cash flow of US$2 billion for 9M FY2024, up 10.2% year on year.
The company also reported a record US$504 million of new digital media annual recurring revenue (ARR) with its exiting RPO exceeding US$18 billion, up 15% year on year.
Adobe projected that revenue for 4Q FY2024 will come in between US$5.5 billion and US$5.5 billion.
At the mid-point, this represents a year-on-year growth of 9.4% from 4Q FY2023’s revenue of US$5.048 billion.
Adobe continues to release new innovations to improve its platform for its customers.
Just this week, the company unveiled innovations for its Adobe Experience Cloud for brands to personalise and measure artificial intelligence (AI) generated content.
It can achieve this through real-time experimentation and performance insights.
Starbucks (NASDAQ: SBUX)
Starbucks is a coffee chain with 39,000 stores worldwide, and serves high-quality arabica coffee.
The company reported a resilient set of earnings for 9M FY2024 ending 30 June 2024.
Net revenue rose 1.9% year on year to US$27.1 billion but operating profit dipped by 1.5% year on year to US$4.1 billion.
Starbucks’ net profit came in at US$2.8 billion, down 1.8% year on year.
Free cash flow generated for 9M FY2024 stood at US$2.6 billion, up 6% year on year from US$2.4 billion a year ago.
The coffee giant also paid out a quarterly dividend of US$0.57, up 10% year on year, and has increased its quarterly dividend for 13 consecutive years since FY2010.
Its active Starbucks Rewards membership in the US continues to grow, totalling 33.8 million and is up 7% year on year during the third quarter of FY2024.
Just last month, the board appointed Brian Niccol as the company’s new CEO to take over Laxman Narasimhan.
Brian Niccol used to be the CEO of Chipotle Mexican Grill (NYSE: CMG) from 2018 to the present and during his tenure, managed to nearly double the Mexican chain’s revenue and increase its profits nearly sevenfold.
Niccol brings a wealth of experience with him and intends to get back to basics and make Starbucks a place with fine coffee where customers wish to linger and enjoy their coffee.
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Disclosure: Royston Yang owns shares of Adobe and Starbucks.
