Investing in stocks is one of the most popular forms of investing. There are multiple types of stocks, each with its own unique characteristics and benefits. One type of stock that is popular among investors is growth stocks. Growth stocks have the potential to deliver higher-than-average returns and provide a long-term investment opportunity. Let’s discuss what growth stocks are and why they may be an attractive option for investors.
What Are Growth Stocks?
Growth stocks are shares of companies whose earnings are expected to grow at a faster rate than the overall market or industry average. These companies typically focus on generating high-profit margins, increasing sales, and expanding their customer base rather than distributing profits to shareholders through dividends or buying back stock. Growth stocks can also be identified by their P/E ratio (price-to-earnings ratio), which measures the current price of a company’s stock against its annual earnings per share—the higher the P/E ratio, the more expensive the stock is relative to its earnings potential.
Growth stocks have become increasingly popular among investors due to their potential for higher returns and long-term appreciation. While growth stocks come with some risk, they can offer greater rewards than traditional blue chip or dividend-paying stocks because they have greater potential for capital appreciation over time as well as lower volatility than other investments such as commodities. Considering all of this, here are three growth stocks to keep an eye on in the stock market today.
Growth Stocks To Buy [Or Sell] Right Now
- Lululemon Athletica Inc. (NASDAQ: LULU)
- Meta Platforms Inc. (NASDAQ: META)
- United Rentals Inc. (NYSE: URI)
Lululemon Athletica (LULU Stock)
Leading off, Lululemon Athletica Inc. (LULU) is a Canadian apparel retailer that specializes in high-end, performance apparel for yoga and other activities. In recent news, late last month the company announced it will release its Q3 2022 financial results, Thursday, December 8, 2022. The company will host a conference call at 4:30 p.m. Eastern time to discuss the financial results.
In the meantime, let’s quickly recap how Lululemon did during Q2 2022. In detail, the company reported 2nd Quarter 2022 earnings of $2.20 per share, along with revenue of $1.9 billion. Aside from that, as it stands today, LULU stock has a P/E ratio of 43.63.
Year-to-date shares of LULU stock are down just over 3%, still outperforming the overall markets. While, during the last month of trading, lululemon Athletica stock has increased by 13.34% as of Wednesday’s closing bell, currently trading at $372.33 a share.
Meta Platforms (META Stock)
Next, Meta Platforms (META) is the world’s largest online social network, with over 3.6 billion monthly active users. Users engage with each other in different ways, exchanging messages and sharing news events, photos, and videos.
In October, Meta Platforms reported a miss for its 3rd Quarter 2022 financial results. During the quarter, Meta announced earnings of $1.64 per share and revenue of $27.7 billion for Q3 2022. Additionally, the company also said in its letter to shareholders that it estimates fourth-quarter 2023 revenue in the range of $30 billion and $32.5 billion.
It’s no surprise that META stock has taken a hit this year, as shares of the tech company’s stock are down 66.35% year-to-date. However, in the last month of trading, Meta Platforms stock has rebounded by 18.10% as of Wednesday’s closing bell at $113.93 a share.
United Rentals (URI Stock)
Lastly, United Rentals (URI) offers a wide variety of rental products and services ranging from heavy construction equipment rentals to tools, supplies, and services for commercial and residential customers. United Rentals is the world’s largest equipment rental provider.
Just today, Wednesday, United Rentals announced that it has completed its previously announced purchase of assets of Ahern Rentals, Inc. The deal is for approximately $2.0 billion in cash. As a result of this transaction, URI will add roughly 2,100 employees, 60,000 rental assets, and 106 locations across the United States.
Moving along, so far in 2022, shares of URI stock have advanced by 6.32%, which outperforms the broader markets year-to-date. With that, on Wednesday, URI stock closed the trading day up 1.22% at $351.52 a share.