As the market mayhem continues, you're likely looking for resilient stocks to invest your hard-earned money in that you can rely on for sustainable, long-term returns. While there's no such thing as a "sure thing" when it comes to investing in the stock market, companies with a solid history of growth in a variety of market conditions, in-demand products or services, and a variety of catalysts for continued growth are often safe bets.
If you have $1,000 to invest right now, here are three top growth stocks to add to your portfolio that can help you weather whatever market storm might be lurking around the corner.
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1. DocuSign
The digital signature industry is growing at an extremely rapid pace and is expected to surpass a global market valuation of $5 billion by 2025. From the professional to the private sphere, documents are vital instruments used to facilitate many aspects of everyday life. And in an increasingly virtual world, it only makes sense that something as basic as the signing of documents is making the transition from the physical to the digital realm.
DocuSign (DOCU 0.10%) is a leader in the e-signature industry and has remained a compelling growth play throughout the pandemic market's highs and lows. Right now, shares of the company are trading almost 50% higher than just one year ago.
It isn't just DocuSign's share price that has skyrocketed during the pandemic, either. In the company's fiscal 2021 (ended Jan. 31), it reported 49% revenue growth, and billings were up 56% compared to fiscal 2020. DocuSign's revenue generated from subscriptions alone rose 50%, while professional services and other revenue jumped 29% from the prior year. Management is projecting that the company will pull in about $2 billion in total revenue in its fiscal 2022, a notable uptick from the $1.5 billion in total revenue it delivered in fiscal 2021.
It's also worth noting that DocuSign was a top growth stock before the pandemic. Case in point: The company reported 39% revenue growth in its fiscal 2020 (ended Jan. 31, 2020).
DocuSign's leadership in the global e-signature market has made it a recession-resilient buy during the market storm of the past year, but it also owes its continued durability to the diversity of its products and services. Beyond its e-signature solutions, DocuSign also offers an array of services including artificial intelligence-powered analytics for digital agreements, digital payment processing, and remote online notarization. Investors searching for sustainable growth and low volatility should consider DocuSign for their portfolios.
2. Pinterest
The social media industry is another sphere that has kept up its rock-solid growth trajectory throughout the pandemic, and Pinterest (PINS -0.64%) is a prime beneficiary of these unstoppable trends. The visual discovery platform boasts nearly half a billion monthly active users worldwide. Pinterest generates much of its revenue from digital ads featured on its platform and is quickly growing both its user base and its balance sheet.
In the full-year 2020, Pinterest reported a 48% spike in its total revenues. Its total monthly active users and average revenue per user also surged by respective rates of 37% and 12%. Broken down by region, Pinterest's U.S. revenues jumped 39% in 2020 while its revenues from international users skyrocketed 129%.
The company is already off to a roaring start in 2021. In the first quarter (ended March 31), Pinterest said that its total revenue grew 78% and its total monthly active user count surged 30% from the year-ago period.
Commenting on Pinterest's first-quarter results, CEO Ben Silbermann stated: "This quarter, we continued strong growth internationally, including our recent launch of advertising in Brazil, and made significant progress with shopping, making it easier for people to discover and buy products they find on Pinterest."
Pinterest is expecting to deliver more than 100% revenue growth in the second quarter alone. And analysts think that Pinterest can deliver triple-digit average annual earnings growth for the next five years.
Pinterest's continued balance sheet and platform expansion in the most uncertain of economic times is a testament to the resilience and novelty of its underlying business. The platform's design as an image-search tool differentiates it from the average social media stock, and it caters to a broad user base from individuals to businesses. With shares trading considerably cheaper than they were just a few months ago, it's a great time to buy the stock on sale to capitalize on its long-term growth potential.
3. GrowGeneration
Marijuana stocks aren't exactly known for low volatility, but that doesn't mean there aren't a few recession-resilient picks among the bunch. GrowGeneration (GRWG -6.38%) is one of them. The company sells hydroponic equipment and other vital supplies to cannabis growers, and has more than four dozen store locations open nationwide at the time of this writing.
2020 was a great year for GrowGeneration. It grew its revenues by an eye-popping 143% and its same-store sales by 63% year over year. Its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) also surged by triple digits -- 264% compared to 2019. GrowGeneration's income from store operations spiked 171% in 2020, while its e-commerce sales jumped 123% year over year. As impressive as all these numbers were, it was the company's bottom-line growth that really blew investors away: GrowGeneration reported that its total net income grew a whopping 308% from 2019.
The company certainly isn't planning to slow down in 2021. From the beginning of the year to the middle of May, management said that GrowGeneration closed nine new acquisitions and added more than a dozen garden centers to its roster of stores. GrowGeneration's first-quarter financial performance was also a continuation of its stellar results in 2020. The company's revenues surged 173% year over year during the three-month period, with same-store sales and e-commerce revenues jumping by respective rates of 51% and 126%.
CEO Darren Lampert said the following about the company's first-quarter performance: "I am proud and encouraged with our 110-basis point increase in gross profit margin and 510-basis point increase in adjusted EBITDA margin. These increases were accomplished despite port delays and supply chain interruptions." He continued, "In addition, we acquired Char Coir, a line of premium coco-based products and Agron.io, a popular B2B e-commerce website. Both companies are now fully integrated and contributing to both our top and bottom-line numbers."
GrowGeneration is looking to increase its 2021 revenue by more than double from last year, while analysts project that the company can consistently grow its average annual earnings by at least 20% in the next five-year period.
If you're a risk-averse investor looking to invest in the cannabis industry, few companies offer the combination of growth, value, and profitability that GrowGeneration does. This stock has plenty of upside left to pursue, and investors who buy now in anticipation of a potential bear market could see some serious returns for years to come.
