Shares of Square, Inc. (SQ -1.40%) have been on fire, having gained a mind-blowing 170% over the last 12 months. The combination of payments processing and additional services has been a huge draw for small- and medium-sized businesses, pushing revenue up 22% year over year in the most recent quarter.
Still, the payments industry is fiercely competitive, and other more established players may try to steal Square's thunder. The company's focus on smaller entities and add-on services has already attracted the attention of competitors, and it wouldn't be difficult to copy Square's ease of use and provide similar services, which could bring the company's share price back to earth.
Fortunately for investors, there a number of other stocks that have doubled over the last year that could still have plenty of room to grow. These high-growth alternatives include Shopify Inc. (SHOP -2.26%), iRobot Corporation (IRBT 0.35%), NVIDIA Corporation (NVDA 1.73%), and Netflix, Inc. (NFLX -0.08%).
Shopify has seen extraordinary growth by making it easier for small- and medium-sized businesses to set up and run an e-commerce website. By providing over 100 pre-designed website templates and 1,000 apps that can customize the shopper experience, the company found hundreds of thousands of eager customers. Shopify's cloud-based software-as-a-service platform can also be accessed on mobile devices to monitor inventory, make sales, and process payments. Amazon.com, Inc. discontinued its competing Amazon Webstore service and endorsed Shopify as a replacement.
Shopify has seen year-over-year revenue increases that have exceeded 85% in every quarter since going public in mid-2015, and growth in gross merchandise volume (GMV) has exceeded 100% in six of its seven public quarters.
Vacuuming up cash
Home robot maker iRobot has been having a stellar year. Despite having more competition than ever before, the company's flagship product -- the Roomba robotic vacuum -- continues to delight both consumers and shareholders. In terms of dollars spent, the Roomba was the most sold vacuum cleaner in the U.S. last year. International sales have been booming, and the company recently completed the acquisition of its Japanese distributor, which should help accelerate its growth in Asia. The company is also reporting promising sales of its Braava hardwood floor cleaner.
In its most recent quarter, iRobot increased revenue by 32% year over year, and net income increased four-fold over the prior-year quarter. These results encouraged management to raise guidance for the full year.
Gaming and so much more
NVIDIA invented graphics processing, and the company has maintained its leadership in the space ever since. Its graphics processing units (GPUs) are the favorite choice for hardcore gamers, and that market has continued to grow. The massive parallel processing capability of GPUs that makes them perfect for rendering graphics also made them uniquely suited for the training of recently developed artificial intelligence (AI) systems. NVIDIA leveraged this opportunity and is currently the industry standard for AI training and many self-driving car systems.
This has led to stellar financial results for NVIDIA. In its most recent quarter, revenue grew by 48% year over year in what is typically the company's slowest quarter. Datacenter revenue, which houses AI growth, increased by a monstrous 186% over the prior-year quarter.
Netflix and chill
Streaming pioneer Netflix has been on a mission to conquer the world since its global expansion in early 2016. The company raised eyebrows when it first announced its plan to produce its own content, but that decision was inspired and is now paying dividends. Netflix intends to spend $6 billion and provide more than 1,000 hours of new content to subscribers in 2017. The company has plans for 50% of its library to consist of self-produced content in the future.
Netflix's just-reported financial results exceeded even the most optimistic estimates as the company continues its worldwide expansion. Revenue for the quarter jumped 32% year over year, trumping both analyst estimates and the company's own internal forecasts, and subscribers grew by over five million. International subscribers exceeded domestic ones for the first time, and the company received 91 Emmy nominations for its shows, nearly doubling the number from last year.
It comes at a price
"There's no such thing as a free lunch," as the old saying goes, and investing is no different. Every one of these companies is producing stellar growth, but that growth doesn't come without risk. By any normal measurement, these companies each sport a hefty valuation that might be a red flag for some investors.
Since Shopify isn't yet profitable, a price-to-earnings comparison isn't possible. Using price to sales as a proxy illustrates that each of these companies exceeds the preferred range of between 1 and 2, which is generally considered to provide a good valuation. The higher the number, the more you are paying for each dollar of sales.
Still, for an investor with a higher tolerance for risk, the rewards can be substantial.