Every investor should strive to grow his or her investment portfolio to achieve a comfortable retirement.
To do so, you need to search for suitable growth stocks that can help you compound your wealth over years or decades.
Fortunately, there is a wealth of investment choices in the US market if you are looking for attractive growth stocks.
Here are four that you may consider adding to your buy watchlist.
Adobe Inc (NASDAQ: ADBE)
Adobe is a software company that utilises artificial intelligence (AI) to offer graphics and design software for designers, artists, and other professionals.
The company has been going from strength to strength as it reported a record-high revenue for its recent fiscal 2023 (FY2023) ending 30 November 2023.
Adobe recorded revenue of US$19.4 billion for FY2023, up 10% year on year.
Around 94.2% of the company’s revenue is made up of subscription revenue, which showcases the merits of its software-as-a-service (SaaS) business model.
Operating profit improved by 9.1% year on year to US$6.7 billion while net profit climbed 14.1% year on year to US$5.4 billion.
Adobe also generated an average positive free cash flow of US$7.1 billion for the past three fiscal years.
The software company forecasts total revenue of between US$21.3 billion to US$21.5 billion, representing a year-on-year increase of 10.3% at the midpoint.
UiPath Inc (NYSE: PATH)
UiPath runs an AI-powered business automation platform that offers clients capabilities to understand, automate, and operate end-to-end processes.
By doing so, these organisations will save time and effort.
The business reported a strong set of financial numbers for the first nine months of fiscal 2024 (9M FY2024) ending 31 October 2023.
Total revenue increased by 20.4% year on year to US$902.8 million while gross profit jumped 23.1% year on year to US$760.2 million.
For 9M FY2024, UiPath generated a positive free cash flow of US$149.9 million, reversing the negative free cash flow of US$125.6 million in the prior year.
The company is also seeing healthy traction for its customer count.
Customers with more than US$100,000 in annual recurring revenue (ARR) jumped to 1,974 in the third quarter of FY2024, up from 1,711 a year ago.
The jump was even sharper for customers with more than US$1 million in ARR, surging 31.3% year on year to 264.
UiPath also enjoyed a dollar-based net retention rate of 121% for its latest quarter, showcasing the stickiness of its customers.
The company recently released a new platform called Autopilot that uses generative AI and specialised AI to improve productivity.
It also announced new connectors for Google AI and Google Workspace to enable engineers to integrate generative text and chat completion into their automation.
On Holdings (NYSE: ONON)
On Holdings is a Swiss company delivering innovation in premium footwear, apparel and accessories for high-performance running, outdoor training, tennis, and other sporting activities.
For the first nine months of 2023 (9M 2023), On Holdings saw net sales leap 57.2% year on year to CHF 1.3 billion.
Operating profit nearly doubled year on year to CHF 139.5 million while net profit increased by 26.4% year on year to CHF 106.3 million, with a lower quantum than operating profit mainly due to exchange losses.
The business also generated a positive free cash flow of CHF 81.6 million for 9M 2023, a sharp reversal from the negative free cash flow of CHF 206.4 million in the previous year.
During last October’s Investor Day, On Holdings announced an ambitious three-year outlook.
It intends to double its expected 2023 net sales by 2026 and will rely on three strategic growth pillars to achieve this – elevate, expand, and establish.
Elevate involves increasing its market share in the Running category while building better brand awareness.
The company will expand its multi-channel distribution and retail presence and also grow its footprint in China.
Finally, On Holdings will establish its training community and develop head-to-toe looks across all its verticals.
Symbiotic (NASDAQ: SYM)
Symbiotic is an automation technology company that uses its AI-powered robotic software platform to reimagine supply chains and enable its customers to move goods with better speed, agility, accuracy, and efficiency.
For the first quarter of fiscal 2024 (1Q FY2024) ending 30 December 2023, Symbiotic saw total revenue surge 78.6% year on year to US$368.5 million.
Gross profit nearly doubled year on year to US$70.1 million.
The company believes it has a long growth runway with a total addressable market of more than US$500 billion.
Symbiotic has a deep competitive moat with 334 global patents awarded and spends US$100 million annually on research and development for its platform.
Some of its prominent customers include Walmart (NYSE: WMT) and Albertsons (NYSE: ACI).
The company’s long-term growth strategy involves increasing existing customer penetration (i.e. getting them to spend more) while winning new customers within its existing verticals.
Over time, Symbiotic plans to add new verticals such as apparel, home improvement, and auto parts with a plan to expand into new geographies.
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Disclosure: Royston Yang owns shares of Adobe.
