Companies that have recently gone public can deliver tremendous returns to investors. These relatively young businesses can often grow at above-average rates for long periods of time -- earnings fortunes for their shareholders along the way.

If that sounds intriguing, here are two recent IPO stocks with particularly appealing growth prospects.

A compass pointing to the word growth

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Peloton Interactive

Peloton (NASDAQ:PTON) is a leader in at-home fitness. The maker of internet-connected treadmills and stationary exercise bikes is building a strong and engaged following of fitness fans. It's a large and growing market -- and Peloton has only just begun to scratch the surface of this booming growth opportunity.

Just days ago, the recent IPO reported a 96% year-over-year surge in what it refers to as "Connected Fitness Subscribers," or people who purchased a Peloton bike or treadmill and pay a monthly fee to access digital workouts. Yet despite this torrid growth, Peloton's 712,000 Connected Fitness Subscribers account for just a small portion of the nearly 40 million U.S. households with annual income of $100,000 or more. That leaves plenty of room for Peloton to become a much larger company in the coming years.

The reason income levels are important is because Peloton's exercise equipment and workout plans aren't cheap. Its bikes and treadmills retail for $2,245 and $4,295, respectively. And its digital workout subscriptions cost as much as $39 per month, which is significantly more expensive than the low-cost gym memberships offered by companies such as Planet Fitness. But the relatively higher cost of its offerings has helped Peloton build an aspirational and somewhat prestigious brand. It should also allow Peloton to ultimately become more profitable than some of its lower-price competitors.

We're already beginning to see evidence of this. Peloton's revenue surged 77%, to more than $466 million, in the second quarter. And as it scales its subscriber and revenue base, Peloton's margins are rapidly improving. Its subscription gross margin rose to 58% in Q2, up from 9.7% in 2017. 

Investors who buy shares in Peloton today are likely to be well rewarded, as the fast-growing company proves out its long-term profit potential.

Grocery Outlet 

Like Peloton, Grocery Outlet (NASDAQ:GO) is a recent IPO with tremendous long-term expansion prospects.

The "extreme value retailer" provides shoppers with savings of 40% to 70% compared to traditional retailers. It also creates a treasure hunt style shopping experience for its customers, by constantly updating its assortment of goods. Together, this helps to boost traffic to its stores and give customers a reason to come back often.

To help make these sizable savings possible, Grocery Outlet employs a team of expert buyers that travel across the country in search of deeply discounted brand name groceries. These value hounds specialize in turning suppliers' surplus inventory and product overruns into tremendous deals for Grocery Outlet's customers. 

It's a formula that's helped Grocery Outlet expand from a single location in San Francisco to more than 300 stores in six states. Looking ahead, management believes the company can eventually expand to as many as 4,800 stores across the U.S. With such vast expansion potential, Grocery Outlet could grow its revenue and earnings at above-average rates for many years to come -- and possibly deliver explosive gains to investors who buy shares today.