Earnings growth concerns abound for 2024. Is the consumer finally going to slow and strike a blow to corporate earnings? These are some of the issues investors must consider heading into 2024. Despite these concerns, there are stocks to buy for growth poised for a great 2024.
So, what makes these stocks top growth picks for 2024? First, these stocks have shown remarkable revenue growth in the past. For instance, in the last fiscal year, each reported revenue growth exceeding 30%.
Secondly, as the latest earnings reports showed, these companies are in excellent shape to continue growing. Notably, they are taking market share from their competitors. Therefore, management expects demand for their products to increase as this trend continues. To this end, management provided a rosy outlook regarding the sales growth prospects in 2024.
These are midcap companies that have many growth opportunities. They have plenty of whitespace to grow. Furthermore, they have yet to tap international and emerging markets, which could be the next growth catalyst. These stocks to buy for growth can provide alpha in your portfolio going forward.
e.l.f. Beauty (ELF)
e.l.f. Beauty (NYSE:ELF) is disrupting the color cosmetics and skin care categories. Recent second quarter fiscal year 2024 results revealed enormous success. The company offers affordable and environmentally friendly skincare products.
Due to its lower prices and clean ingredients, its products have become popular among cost, health and environment-conscious consumers, especially Gen Z. In the recent Piper Sandler Taking Stock With Teens survey, e.l.f ranked as the top cosmetic brand among female teens.
Many things are going right for one of the best stocks to buy for growth. Recent quarterly results highlighted tremendous momentum with 76% year-over-year growth. All three growth segments, color cosmetics, skincare and international, were solid.
Color cosmetics grew 51% in tracked channels, a significant outperformance from the sector’s 3%. According to Nielsen, e.l.f. is the only brand that has grown market share for 19 straight quarters. As a result, it now has a 10% market share, up from 4.5% in 2019.
In terms of expansion opportunities, the company has plenty of white space for growth. This year, it expanded space at Walmart (NYSE:WMT), CVS Health (NYSE:CVS), Target (NYSE:TGT), Walgreens (NYSE:WBA) and Ulta Beauty (NYSE:ULTA).
The other segments are also delivering robust earnings. Skincare was even more impressive, delivering 129% growth in tracked channels. e.l.f. SKIN increased its share, reaching number 14 from 19 a year ago. Finally, international sales grew 157% YOY, aided by strength in the U.K. and Canada.
Since management has forecasted explosive growth in 2024, it is time to buy ELF stock. Previously, they expected FY2024 revenue growth in the 37-39% range. But in their Q2 FY2024 earnings, they updated the guidance to 50-55% for the fiscal year.
Celsius (CELH)
Celsius (NASDAQ:CELH) is disrupting the energy drink space and gaining share. While skepticism about the brand’s longevity has existed, the company continues to prove doubters wrong. As usual, recent earnings were impressive, with 104% revenue growth.
From a small brand, Celsius is growing into a significant player. In the U.S., Celsius has the third largest market share in the energy drink market. Notably, the firm has doubled its share from 4.4% in the third quarter of 2022 to about 10.5%.
Based on third-quarter earnings comments, the company is seeing growth across all its channels. For instance, Celsius is now the best-selling energy drink on Amazon (NASDAQ:AMZN). Notably, it has a 21.4% share on the e-commerce platform ahead of Monster Beverage’s (NASDAQ:MNST) 18.6% and Redbull’s 13%. It is also the top energy drink on Instacart (NASDAQ:CART).
Like e.l.f., Celsius has a tremendous growth opportunity as we head into 2024. With international sales below 5% of the total, it could generate significant revenue from global expansion. In 2022, the company entered a partnership agreement with PepsiCo (NYSE:PEP). Using Pepsi’s distribution and marketing capability, Celsius plans to expand more aggressively internationally.
Management disclosed plans to expand into Canada in the first quarter of 2024 in their third-quarter earnings. This will be the first international expansion under the PepsiCo umbrella. Moreover, management plans to expand into a handful of other countries next year and more in 2025 and 2026.
Buy CELH stock for the tremendous growth ahead. Besides new markets, new products like Vibe Flavor and Cosmic Vibe will fuel growth. And with Pepsi as a distribution partner, Celsius will see more store and shelf placement.
Super Micro Computer (SMCI)
According to management guidance, Super Micro Computer (NASDAQ:SMCI) will have explosive growth in 2024. The company recently beat earnings estimates and raised guidance due to strong demand for AI infrastructure.
This server company is an artificial intelligence beneficiary experiencing revenue tailwinds from generative AI. Demand for its plug-and-play rack-scale servers with Nvidia (NASDAQ:NVDA) HGX-H100 chips has soared. Customers are increasing orders for AI servers that can handle more AI computing and workloads.
Super Micro has several catalysts that underpin its status as one of the stocks to buy for growth. Traditional servers don’t have the chips to handle AI workloads efficiently. Since AI is becoming prevalent, companies must replace their outdated servers. This replacement cycle sets the stage for a massive revenue tailwind.
Given the soaring demand, management is very positive. After reporting third-quarter earnings, they raised fiscal year 2024 revenues from $9.5 billion to $10.5 billion to $10 billion to $11 billion. Super Micro disclosed that it is expanding its validation and production facilities to increase rack production to 5,000 per month.
The company is broadening its AI portfolio and expects to gain share in accelerated computing. It has launched a new inferencing platform based on Nvidia’s L40S, L40, L4 and H100 chips. It also has server solutions that include Advanced Micro Devices (NASDAQ:AMD) AMI250, MI300X and MI300A.
Super Micro is set for explosive growth in 2024 as it increases the delivery of optimized AI infrastructure. The future is bright, and management predicts $20 billion in annual revenue in a few years.
— Charles Munyi
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Source: Investor Place