A good stock can help you outperform the market and reach your financial goals sooner. While many investors seek to find a winning stock, it’s best to diversify your holdings across numerous assets. This has led to this list of top stocks to buy.
Spreading your money across multiple stocks minimizes your risk. You also have the opportunity to generate higher long-term returns. It’s good to shop around for stocks even when you feel content with your portfolio. Always reviewing investment ideas allows you to capitalize on great deals when they arrive.
Investors can choose from thousands of publicly traded corporations. However, you may want to consider buying at least one of these seven top stocks to buy.
Elf Beauty (ELF)
Elf Beauty (NYSE:ELF) has entered a sharp correction ever since its competitor Ulta Beauty (NYSE:ULTA) warned investors about a slower beauty market. The recent pullback has resulted in a 46-forward P/E ratio for the cosmetics company.
While some investors may feel nervous about the valuation, the reaction to Ulta news is overdone. The two beauty companies are in different leagues when it comes to growth rates. Ulta’s revenue growth hovers at around 10% year-over-year. Meanwhile, Elf Beauty reported an 85% year-over-year increase in net sales and gained 305 basis points of market share in Q3 FY24.
Elf Beauty has been maintaining 80% year-over-year revenue growth for several quarters while delivering impressive net income growth as well. The company also raised its fiscal 2024 outlook and achieved its 20th consecutive quarter of growth.
Analysts have rated the stock as a “Moderate Buy” with a projected 30% upside. The stock has already been up by 92% over the past year. The correction presents a long-term buying opportunity, and it’s possible for Elf Beauty to gain market share while others in the industry report slower sales. The second stock on this list follows that trend.
Crowdstrike (CRWD)
Crowdstrike (NASDAQ:CRWD) is a cybersecurity firm that continues to grow at a solid rate while competitors are slamming the brakes and announcing lukewarm guidance. Crowdstrike previously declined in solidarity with other cybersecurity stocks as they reported unfavorable guidance. Investors had a change of heart after Crowdstrike reported a strong earnings report for Q4 FY24.
Revenue grew by 33% year-over-year to reach $845.3 million. The company also has $3.44 billion in annual recurring revenue which serves as a good baseline. It’s getting easier for hackers to threaten companies. They can use artificial intelligence to brute force their way into unprotected databases. These tools are getting more advanced, and the Crowdstrike Falcon Platform offers good protection from cyberattacks. This makes it one of those top stocks to buy.
Crowdstrike has always delivered impressive revenue growth, but the company’s rising profit margins are also stirring up excitement. The company reported $53.7 million in GAAP net income compared to a $47.5 million GAAP net loss in the same period last year. The stock has gained 392% over the past five years.
Semrush (SEMR)
Semrush (NYSE:SEMR) is a search engine marketing tool that helps businesses identify promising keywords. The first page of Google is prime real estate for online and local businesses. Those placements result in more website visitors who can turn into leads.
Competition in the industry is fierce, and Semrush gives many business owners the resources they need to succeed. Semrush is more than just keyword research. You can conduct detailed competitor analyses and discover opportunities to grow your business.
The stock has been bumpy since its IPO but is getting into the swing with a 31% gain over the past year. The company recently became profitable and reported an 8.5% net profit margin in Q4 2023. That quarter also featured a 21% year-over-year revenue increase. Full-year net income came in at $1.0 million while the company generated $6.9 million in Q4 2023 net income.
Semrush has approximately 108,000 paying customers which is a 12.5% year-over-year improvement. This broad customer pool can insulate the business from sharp revenue declines. Furthermore, some of the company’s paying customers may upgrade their plans to access additional features.
Chipotle (CMG)
Chipotle (NYSE:CMG) is gaining market share in the fast food industry and continues to generate double-digit growth rates for its top and bottom lines. The fourth quarter of 2023 featured 15.4% year-over-year revenue growth and 26.1% year-over-year net income growth. Chipotle’s net profit margin increased to 11.2%.
The company opened 121 restaurants in Q4 2023 and 271 new restaurants in the full year. Most of these restaurants include Chipotlanes, which allows the company to serve more customers. Chipotle has plans to open 285-315 restaurants in 2024 which is a 10.7% year-over-year improvement at the midpoint.
Chipotle stock will go through a 50-for-1 stock split in June. The stock split will make shares more accessible and increase options trading volume. The stock has done a fine job of outperforming the stock market before its upcoming split. Shares are up by 308% over the past five years. It’s one of those top stocks to buy.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) continues to win support from Wall Street analysts. Cloud computing, online marketplace sales, advertising, and video streaming are some of the catalysts that are prompting higher price targets.
The stock currently has a “Strong Buy” rating and an average price target that suggests a 13% upside. Amazon only has Buy ratings from its 41 analysts. The highest price target of $230 per share suggests that the stock can rally by an additional 24%.
Amazon is growing in multiple industries and recently reported its highest-ever revenue. Net sales increased by 14% year-over-year to reach $170 billion in Q4 2023. North American and international sales accelerated in the fourth quarter, while Amazon Web Services revenue growth stayed in line for Q4 2023 compared to full-year 2023. All in all, it’s one of those top stocks to buy.
The segment had a 13% year-over-year growth rate for both time periods. Advertising services did even better with 27% year-over-year revenue growth.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) has outperformed the stock market with a 146% gain over the past year. Shares are also off to a hot start with a 52% year-to-date gain and come with a 34 P/E ratio.
The company’s commitment to expanding profit margins can result in a more enticing valuation in the future. Meta Platforms more than tripled its net income in the fourth quarter of 2023. Revenue was 25% higher in the quarter compared to the same time last year.
Meta Platforms don’t only have good growth rates. It also has a healthy balance sheet. The social media firm has $65.40 billion in cash, cash equivalents, and marketable securities. On the other hand, it only has $18.39 billion in long-term debt. Meta Platforms reduced its headcount by 22% year-over-year to facilitate its profit margin expansion.
META stock has now become a dividend growth play as the company recently announced a quarterly dividend of $0.50 per share. The company will probably maintain an annualized growth rate above 10% for many years.
Celsius Holdings (CELH)
Celsius Holdings (NASDAQ:CELH) offers healthy sports beverages that does not have ingredients like high fructose corn syrup, sugar, or gluten. The drink also contains essential vitamins and plenty of caffeine.
Analysts are bullish on the stock and have rated it as a “Strong Buy.” The stock has a projected 11% upside at the average price target. The highest price target of $110 per share implies that shares can rally by an additional 31% from current levels.
The company is growing at a fast rate and is gaining market share from its competitors. Celsius Holdings reported 95% year-over-year revenue growth in Q4 2023. The sports beverage company generated $322.8 million of its $347.4 million in North America. International revenue grew by 68% year-over-year and is still in its early innings.
The company is on the verge of tapping into Australian and New Zealand markets. The beverages will reach the continent in Q4 2024. Domestic sales remain elevated, and international traction can lead to high revenue growth for several years. The company has maintained double-digit profit margins while generating substantial top-line growth rates. All in all, it’s one of those top stocks to buy.
On this date of publication, Marc Guberti held long positions in ELF, AMZN, and CELH. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.