As the saying goes – when a business does well, its share price should naturally follow.
A company that can grow its revenue, profits and free cash flow becomes more valuable, spurring investors to pay more to own a piece of it.
Therefore, a business that demonstrates consistent growth in profits should see its share prices climb steadily.
Growth stocks can deliver such performances but you need to be discerning and select your businesses carefully.
We shine the spotlight on five US stocks that recently hit their 52-week highs and assess if they can continue to perform well.
Dutch Bros (NYSE: BROS)
Dutch Bros is a coffee chain serving hand-crafted and high-quality beverages.
The company has 950 locations across 18 states in the US as of 30 September 2024.
Shares of Dutch Bros recently hit their 52-week high of US$56.10 and are up more than 70% year-to-date (YTD).
The coffee chain reported a strong set of earnings for the first nine months of 2024 (9M 2024).
Revenue climbed 31.8% year on year to US$938.2 million while operating profit more than doubled year on year to US$90.3 million.
Net profit stood at US$31.6 million, a sharp increase from the prior year’s US$3.1 million.
The company managed to eke out a small positive free cash flow of US$5.2 million for 9M 2024, a reversal from the prior year’s negative free cash flow of US$72.8 million.
A total of 119 new stores were opened in 9M 2024, slightly less than the 123 stores opened in the previous corresponding period.
Dutch Bros revised its 2024 outlook with revenue projected to come in between US$1.255 billion and US$1.26 billion, up from the previous range of US$1.215 billion to US$1.23 billion.
Clorox (NYSE: CLX)
Clorox is a manufacturer of consumer and professional products and sells its products under famous brands such as Clorox, Glad, Pine-Sol, and Hidden Valley.
Clorox’s share price has shot up around 13.8% YTD and hit its 52-week high of US$171.37 recently.
The consumer goods company reported an encouraging set of earnings for the first quarter of fiscal 2025 (1Q FY2025) ending 30 September 2024.
Revenue rose 27.1% year on year to US$1.8 billion while gross profit increased by 51.7% year on year to US$807 million.
Net profit more than quadrupled year on year to US$103 million.
1Q FY2025 saw free cash flow come in at US$182 million, a sharp reversal from the negative free cash flow of US$4 million last year.
A quarterly dividend of US$1.22 was announced, slightly above the US$1.20 paid a year ago.
The business achieved its eighth consecutive quarter of gross margin expansion and is on track for gross margin to continue improving in FY2025.
The company also delivered double-digit organic sales growth across all its business segments.
Hyatt Hotels (NYSE: H)
Hyatt Hotels is a leading hospitality company with a portfolio of more than 1,350 hotels and properties across 79 countries.
Some famous brands under the company’s umbrella include Grand Hyatt, Andaz, UrCove, and Dream Hotels.
The hotel chain saw its share price touch a 52-week high of US$168.20 and is up more than 24% YTD.
The company reported a mixed set of results for 9M 2024.
Total revenue inched up just 0.8% year on year to US$5 billion while net profit came in at US$1.4 billion.
Adjusting for gains on real estate, Hyatt would have reported a net profit of US$85 million for 9M 2024, less than half of the US$176 million net profit a year ago.
Free cash flow stood healthy at US$279 million for the nine months, and the hotel giant paid out a quarterly dividend of US$0.15 per share, unchanged from a year ago.
Management will continue with its capital allocation strategy of investing in growth to create shareholder value and to return excess cash to shareholders.
Shake Shack (NYSE: SHAK)
Shake Shack is an American casual dining restaurant chain serving burgers, fries, and shakes.
The restaurant chain’s share price has soared 88% YTD and touched its 52-week high of US$139.89.
For 9M 2024, Shake Shack saw its total revenue rise 15.3% year on year to US$923.9 million.
However, the burger chain reported an operating loss of US$7.2 million because of a US$30.7 million impairment loss booked.
Net profit for 9M 2024 came in at US$1.5 million, a far cry from the US$13 million reported in 9M 2023.
Despite the lower profit, Shake Shack managed to generate a positive free cash flow of US$25.3 million for 9M 2024, reversing the negative free cash flow of US$22.4 million a year ago.
During the third quarter of 2024 (3Q 2024), the company opened eight new company-operated outlets and nine licensed outlets.
Shake Shack ended the quarter with 552 company-operated and licensed stores, up from 495 in the previous year.
ServiceNow (NYSE: NOW)
ServiceNow operates a cloud computing platform that helps businesses to manage digital workflows for enterprise operations.
The company’s share price has been on a tear, leaping 66.8% YTD and hitting a recent all-time and 52-week high of US$1,157.90.
ServiceNow reported a 22.8% year-on-year increase in revenue to US$8 billion for 9M 2024.
Operating profit more than doubled year on year to US$990 million.
Net profit was 27.5% lower than a year ago, at US$1 billion, mainly because of a prior year tax credit that boosted net profit for 9M 2023.
Free cash flow remained healthy and jumped nearly 50% year on year to US$2 billion for 9M 2024.
The business is also steadily expanding its customer relationships.
The number of customers with annual contract value (ACV) of more than US$1 million increased by 14% year on year to 2,020 for 3Q 2024.
The average ACV of these customers also grew from US$4.4 million to US$4.8 million over the same period.
The company is utilising artificial intelligence (AI) agents to unlock higher productivity for various functions such as customer service, procurement, and human resources.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
