4 Growth Stocks to Buy and Hold Forever

Growth stocks aren't hard to find. They're everywhere and often touted by some of the investment industry's most prolific voices. A growth stock you can feel good about holding on to forever, however, is a different story. If we're being honest, many investors are renting most growth names rather than buying them for the long haul, hoping to cash in on a temporary mania.

With that as the backdrop, here's a closer look at four great growth stocks with real, permanent staying power. The world will need their products and services for a long time, boding well for their underlying stocks even if they're not creating much hype.

1. Generac Holdings

When most investors think of a home generator, they envision a dirty, gas-powered engine with a couple of electrical outlets attached, to be dragged out and dusted off in the event of a prolonged power outage.

That's anything but the sort of solutions Generac Holdings (GNRC 2.47%) brings to the table, though. Its modern generators are automated, remotely monitored, and connected to a home's or business's wiring in a way that allows for seamless operation. And, even more important these days, Generac's portfolio provides energy storage solutions for solar panel systems that are generating excess energy during the day to supply electricity at night.

In an environment where self-sufficiency is king, Generac Holdings is holding the proverbial key. Although this year's projected revenue growth of nearly 39% is a tough act to follow, the company's projected follow-up growth rate of 9% for 2023 is still plenty healthy. Per-share earnings are expected to swell from last year's $9.63 to $11.73 per share this year, en route to next year's record-breaking $13.89.

2. MercadoLibre

It's been called the Amazon of Latin America, although the description doesn't do it justice. While MercadoLibre (MELI -1.98%) certainly has some similarities to Amazon, it's just as comparable to PayPal as well as eBay, aggregating a bunch of different sorts of consumer-facing digital services in a relatively underserved market.

Deloitte puts some things in perspective, suggesting Argentina, Colombia, Mexico, and Peru -- all important markets for MercadoLibre -- will see economic growth of 3%, 5.8%, 1.8%, and 3.5% (respectively) this year, followed by growth rates of 2.5%, 3.5%, 2%, and 3.1% next year. That's growth despite the economic impact on the region stemming from Russia's invasion of Ukraine, which disproportionally works against Latin America and South America.

What Deloitte's projection doesn't point out, however, is how most of this market is still in the midst of a digital revolution. GSMA forecasts Latin America will be home to 100 million more smartphone owners by the end of 2025 than there were as of the end of last year, while the Inter-American Development Bank reports that Latin America's fintech ecosystem expanded by 112% between 2018 and 2021. Meanwhile, the most recent EBANX Beyond Borders report points out that Latin America is one of the world's hottest regions for e-commerce growth, with online business expected to expand by no less than 29% per year through 2025 when it reaches a whopping $829 billion.

In summary, this is becoming a huge digital market, playing right into all the hands MercadoLibre is holding.

3. Incyte

You may be more familiar with biopharma outfit Incyte (INCY 0.19%) than you realize. This is the company behind leukemia drug Iclusig and arthritis treatment Olumiant.

Its claim to fame, however, is Jakafi, for myelofibrosis and polycythemia vera, which are bone and blood cancers, respectively. Incyte sold nearly $600 million worth of the drug last quarter alone, accounting for two-thirds of its revenue, which was up 29% year over year.

Jakafi's far from reaching its peak revenue potential, though. Analysts believe companywide sales are on pace to grow nearly 14% this year before accelerating more than 15% next year.

The real story here, however, is profit growth. While Incyte may be a bit of a one-trick pony, the pharmaceutical business is one that scales nicely. That is to say, manufacturing and marketing costs don't swell dollar for dollar with revenue when a new drug like Jakafi starts being embraced by the medical community.

To this end, the analyst community is forecasting per-share earnings of $3.20 this year, up 16% from last year's bottom line, with 44% growth to a profit of $4.60 per share in the cards next year when inflation is (hopefully) tamed.

That growth train will stop chugging along sometime, once its top-selling drug runs out of marketable uses and then starts losing patent protection. Jakafi-driven earnings generated in the meantime, however, means Incyte should now be able to buy new drugs and fully fund research and development of pharmaceuticals with just as much -- if not more -- potential.

In this vein, the company has 16 different molecular formations currently in its R&D portfolio. That's enough to keep Incyte busy for decades.

4. ServiceNow

Finally, add ServiceNow (NOW -0.69%) to your list of growth stocks to buy and hold forever.

It's not a household name, but there's a good chance you or someone in your household benefits from its products. ServiceNow is one of a handful of companies in the digital workflow space; you'll sometimes hear it referred to as automation software, although both terms can be loosely, broadly interpreted.

Regardless of what you call it, the end result is the same: These tools allow most employees to create their own automated computer algorithms to automate tedious, repetitive tasks. ServiceNow offers a variety of workflow platforms custom-built for applications ranging from communications to operations to asset management, and more.

And it's good at what it does. For the second year in a row, information technology consulting outfit Gartner named ServiceNow's strategic portfolio management platform as a leader of the agile planning tools market. It's been named one of the top options among low-code application services for a couple of years in a row now as well.

The industry is due for a great deal more growth, too. Market research company Technavio expects the digital process automation market to expand by an average of more than 15% per year through 2026, jibing with Emergen Research's outlook for more than 23% growth for the industry through 2030.

And ServiceNow is certainly capturing more than its fair share of this growth. Analysts are modeling top-line growth of nearly 24% for this year and next, with earnings likely to grow at an even faster clip.