Growth investors were left stunned last year when the NASDAQ Composite Index lost a third of its value, taking a major swath of growth stocks along with it.
The bellwether technology stock index had shuddered after the fizzling out of the pandemic surge left many companies high and dry.
But growth investing is far from dead.
In a dramatic about-turn, the index has come roaring back this year, posting a near-33% gain in the first half of 2023.
It was also the index’s best performance in the last four decades.
Many innovative companies are still reporting healthy growth as they continue to dish out useful products and services to their customers.
Here are five US stocks with promising prospects that could provide a boost to your investment portfolio.
Toast (NYSE: TOST)
Toast offers a cloud-based platform that serves the restaurant community, giving these food and beverage (F&B) outlets everything they need to run their business.
Its software covers dine-in, takeout and delivery channels and helps these F&B businesses to streamline operations, increase revenue, and satisfy customers.
Toast reported a strong performance for its fiscal 2023’s first quarter (1Q 2023) ending 31 March.
Revenue jumped 53% year on year to US$819 million while gross profit surged 96% year on year to US$174 million.
The company’s gross payments volume (GPV) increased 50% year on year to US$26.7 billion with annual recurring run-rate (ARR) shooting up 55% year on year to US$987 million.
Toast has also increased the number of locations that have installed its software from 62,000 in 1Q 2022 to 85,000 in the current quarter.
The business believes it has a massive total addressable market (TAM) of US$55 billion in the US alone, and this TAM expands to US$110 billion or more if you consider the global F&B market.
Confluent (NASDAQ: CFLT)
Confluent operates a cloud service and data streaming platform that collates multiple data sources in real-time to deliver key findings and insights to its customers.
The company reported a 38% year-on-year increase in revenue to US$174 million for 1Q 2023.
Cloud revenue took up US$74 million of the total and grew 89% year on year.
Confluent is also rapidly growing its customer base, with total customers rising 14% year on year to 4,690.
In particular, customers with ARR exceeding US$1 million saw a 53% year on year growth to 135.
Management believes the company has a TAM of US$60 billion that is growing at 19% per annum to reach US$100 billion by 2025.
Mondelez (NASDAQ: MDLZ)
Mondelez is a snack company that produces chocolates and biscuits under famous brands such as Cadbury, Chips Ahoy!, Cote D’Or, Ritz, Milka, and Oreo.
The company saw net revenues climb 18.1% year on year to US$9.2 billion while gross profit improved by 15.5% year on year to US$3.4 billion.
Net profit more than doubled year on year to US$2.1 billion.
Mondelez also continued to churn out a positive free cash flow of US$900 million.
The snack company also paid out a quarterly dividend of US$0.385 per share, up 10% from the US$0.35 paid out a year ago.
DocuSign (NASDAQ: DOCU)
DocuSign offers an electronic signature product that makes it easy to sign a document or agreement on any device in almost any part of the world.
The company boasts more than a billion users in over 180 countries.
For its fiscal 2024’s first quarter (1Q FY2024) ending 30 April, DocuSign saw a 12% year-on-year increase in revenue to US$661.4 million.
Billings saw continued growth of 10% year on year to US$674.8 million.
The company’s free cash flow also improved from US$174.6 million in 1Q FY2023 to US$214.6 million in the current quarter.
Total customers have reached 1.4 million in 1Q FY2024, up nearly fourfold from 373,000 in FY2018.
Enterprise and commercial customers hit 220,000, up more than fivefold from 43,000 over the same period.
DocuSign’s TAM stood at US$50 billion and the business believes that it still has a large untapped opportunity to reach out to more businesses to digitalise their agreements process.
Lululemon (NASDAQ: LULU)
Lululemon sells athletic apparel and footwear for yoga, running, and training.
For its 1Q 2023 results, the company saw revenue increase 24% year on year to US$2 billion.
Comparable store sales improved by 14% year on year with direct-to-consumer revenue making up 42% of total sales.
Net profit surged by 52.8% year on year to US$290.4 million.
A total of seven net new company-operated stores were opened during 1Q 2023, taking the company’s total store count to 662.
Last year, Lululemon announced its five-year growth plan, the Power of Three x 2, to double its revenue to US$12.5 billion by 2026.
To do so, the company will focus on product innovation, improving customer experience, and achieving market expansion.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
