If you are a growth investor looking for capital gains, there’s good news.
The technology-heavy NASDAQ Composite Index has surged 26.2% year to date while the bellwether S&P 500 Index has climbed 11.6% during the same period.
Investors are feeling more bullish on technology stocks as they rebound after a punishing 2022 when the NASDAQ Composite Index lost a third of its value.
This rally is not without merit.
Many companies have posted impressive growth even as economic worries such as inflation and high interest rates vex investors.
Here are five US growth stocks that could give your investment portfolio a strong performance boost.
Okta (NASDAQ: OKTA)
Okta is a software-as-a-service (SaaS) company that offers a workforce and identity management cloud platform for organisations to manage secure access and authentication.
Demand for the company’s services has been growing steadily, as evidenced by its recent fiscal 2024 first quarter (1Q FY2024) results ending 30 April.
Revenue grew 25% year on year to US$518 million with subscription revenue taking up US$503 million, up 26% year on year.
Free cash flow improved significantly to US$124 million for a free cash flow margin of 24% compared to just US$11 million in the prior year.
Okta’s customer base has risen by 14.2% year on year to 18,050, with customers with more than US$100,000 in annual contract value (ACV) climbing 23% year on year to 4,080.
The identity management specialist forecasts that revenue for FY2024 will grow by 17% to 18% year on year with a free cash flow margin of around 12%.
Okta believes that it still has a long runway for growth as there is an US$80 billion total addressable market for its services.
Snowflake (NYSE: SNOW)
Snowflake offers a data cloud platform that helps organisations to collate and securely share data that can be analysed in different ways.
Revenue for 1Q FY2024 hit US$623.6 million, up 48% year on year, with product revenue taking up US$590.1 million of this total, up 50% year on year.
Free cash flow for the quarter surged by 64.2% year on year to US$283.1 million.
Snowflake’s customer base grew 29% year on year to 8,167 and customers with more than US$1 million product revenue grew more rapidly at 80% year on year to 373.
The company’s dollar-based net revenue retention rate (DBNRR) remained high at 151% for 1Q FY2024, though it came down from 174% in the previous year.
Snowflake also announced remaining performance obligations (RPO) of US$3.4 billion for a 31% year-on-year growth.
Like Okta, Snowflake enjoys a large TAM of around US$248 billion by calendar year (CY) 2026.
ZScaler (NASDAQ: ZS)
Zscaler is a cybersecurity firm that protects thousands of customers from cyberattacks and data loss by offering its Zero Trust Exchange platform.
The company platform is distributed across 150 data centres worldwide and is the world’s largest in-line cloud security platform.
Zscaler reported an impressive set of earnings for its fiscal 2023’s third quarter (3Q FY2023) ending 30 April 2023.
Revenue jumped 46% year on year to US$418.8 million with billings growing 40% year on year to US$482.3 million.
The business enjoys a very high retention rate of 90% and its DBNRR is above 125% for the quarter.
Free cash flow for the quarter has also grown from US$43.7 million to US$73.9 million in 3Q FY2023 and makes up 18% of revenue, up from 15% a year back.
Zscaler boasts an impressive customer base with 40% being Fortune 500 customers.
Additionally, customers with annual recurring revenue of US$1 million climbed 39% year on year to 400.
Atlassian (NASDAQ: TEAM)
Atlassian provides collaboration and productivity software for businesses to work and plan more efficiently.
For its 3Q FY2023 ending 31 March, the company’s revenue rose 24% year on year to US$915 million.
Subscription revenue came in at US$761 million and grew 37% year on year.
Free cash flow came in at US$349.7 million for an impressive free cash flow margin of 38% for the quarter.
Atlassian’s customer base hit 259,775 for 3Q FY2023, up 10.7% from the prior year’s 234,575.
For the fourth quarter, the company expects revenue to come in the range of US$900 million to US$920 million, implying that full-year revenue growth should come in at approximately 25% year on year.
Monster Beverage (NASDAQ: MNST)
Monster Beverage is an energy drinks manufacturer and distributor with popular brands such as Monster, Reign, Rehab, and Predator.
The company reported a record first-quarter sales performance for the period ending 31 March 2023.
Revenue climbed 11.9% year on year to US$1.7 billion with gross margin improving from 51.1% a year ago to 52.8% for the current quarter.
Net profit soared 35.1% year on year to US$397.4 million.
Monster Beverage launched its first flavoured malt beverage alcohol product called “The Beast Unleashed” in six states in the US.
The early results look promising and management intends to expand distribution into additional markets.
The company has also launched a pure unflavoured water line called Monster Tour Water in still and sparkling variants in certain areas of the US.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
