3 growth stocks with explosive upside

Growth is oxygen. But when it evaporates, the consequences can be severe – ask anyone who bought Cisco in the Dot-Com Bubble or newer investors who lived through the 2020 to 2022 COVID cycle.

The risks that can come from buying these assets are precisely why we started StockStory — to isolate the long-term winners from the losers so you can invest with confidence. Keeping that in mind, here are three growth stocks where the best is yet to come.

Comfort Systems (FIX)

One-Year Revenue Growth: +50.7%

Formed through the merger of 12 companies, Comfort Systems (NYSE:FIX) provides mechanical and electrical contracting services.

Why Will FIX Outperform?

1. Demand is greater than supply as the company’s 60.2% average backlog growth over the past two years shows it’s securing new contracts and accumulating more orders than it can fulfill

2. Free cash flow margin expanded by 15.4 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends

3. Returns on capital are climbing as management makes more lucrative bets

At $1,163 per share, Comfort Systems trades at 22.3x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

Quanta (PWR)

One-Year Revenue Growth: +26.3%

A construction engineering services company, Quanta (NYSE:PWR) provides infrastructure solutions to a variety of sectors, including energy and communications.

Why Is PWR a Good Business?

1. Backlog has averaged 25.2% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future

2. Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 32.9% outpaced its revenue gains

3. Free cash flow margin increased by 7 percentage points over the last five years, giving the company more capital to invest or return to shareholders

Quanta’s stock price of $545.61 implies a valuation ratio of 29.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Woodward (WWD)

One-Year Revenue Growth: +22.3%

Initially designing controls for water wheels in the early 1900s, Woodward (NASDAQ:WWD) designs, services, and manufactures energy control products and optimization solutions.

Why Should You Buy WWD?

1. Impressive 13.7% annual revenue growth over the last five years indicates it’s winning market share this cycle

2. Operating margin improvement of 6.7 percentage points over the last five years demonstrates its ability to scale efficiently

3. Share buybacks catapulted its annual earnings per share growth to 22.5%, which outperformed its revenue gains over the last two years