There was a time when growth could fix anything. Healthy top-line bursts were enough to impress investors. Take big steps. Grab market share. The market would forgive operational stumbles and a lack of profitability.
Growth hasn't been enough the last year and change, but it's still cool to watch. Celsius Holdings (CELH -0.04%), CrowdStrike (CRWD -0.68%), and fuboTV (FUBO -3.50%) are three companies with strong recent revenue growth rates. It's inevitable that growth stocks will come back in fashion at some point, and if it happens soon you're going to want to buy stocks like these now.
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1. Celsius Holdings
When it comes to growth, Celsius is as fizzy as its functional energy beverages. The company behind the canned sparkling beverages that claim to burn calories by speeding up metabolism is seeing its popularity explode. Revenue soared 98% in its latest quarter, well ahead of the 71% increase that analysts were forecasting.
It's not a fluke. The report actually narrowly ended a streak of five consecutive quarters of triple-digit top-line growth. Zoom out and this will be the sixth straight year of better than 40% revenue gains.
Celsius is turning heads, and earlier this year it got the world's second-largest soft drink company to put some skin in this game. PepsiCo (PEP 3.62%) added $550 million to Celsius' liquidity this summer in exchange for 8.5% stake in the company. A big part of the transaction is that PepsiCo becomes the primary distribution partner for Celsius in the U.S. market where the product line is already booming. It also makes PepsiCo a preferred distribution partner overseas where the ceiling is high but currently just 5% of the revenue mix for Celsius.
Red ink is a problem, but gross profit and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) posted triple-digit percentage gains in Celsius' latest quarter. Celsius is sparkling in more ways than one.
2. CrowdStrike
There are a lot of cloud-based platforms seeing their once heady growth decelerate sharply. Enterprises are paring back their expenditures given economic uncertainties, but you can't skimp on security. CrowdStrike offers cloud-native endpoint protection using big data and AI to ward off security threats.
Growth has slowed at CrowdStrike, but it has come at a reasonable pace as the platform expands its popularity. Top-line growth has been cut in half over the past 16 quarters -- from 108% to 53% -- but you won't find too many investors complaining about 53% year-over-year gains, especially when annual recurring revenue is growing slightly faster.
CrowdStrike isn't hurting for business. It has seen its subscription customers rise by 44% to 21,146 over the past year. It's now profitable on an adjusted basis, and CrowdStrike just scored record cash flow from operations and free cash flow in its latest quarter. Hackers will only get smarter, and cybersecurity will remain a top priority.
3. fuboTV
Let's talk sports. Let's talk TV. A lot of people are cutting the cord when it comes to their cable and satellite television plans. There's no shortage of great streaming services to fill the void, but if there's a live sports itch to scratch you're going to need a live TV streaming service. FuboTV isn't the top dog in this niche, but it's the fastest-growing player as it gains market share with every passing quarter.
Like Celsius Holdings and CrowdStrike, fuboTV saw its streak of triple-digit growth end earlier this year. The year-over-year increase on the top line was a modest 44% in its latest quarter, but for a business model that relies on subscription and ad revenue it's better than par for the course.
The three stocks here have gone in different directions this year. CrowdStrike has been cut in half. Celsius is bucking the market malaise, up a refreshing 43% in 2022. FuboTV takes the cake of the pity party, down a portfolio-crushing 88% year to date.
There are some good reasons for fuboTV being the worst performer. Costly plans to turn into a betting hotspot for sports fans fizzled out. It's also losing a lot of money for a small company. The silver lining is that fuboTV is still a dinner bell for cord-cutting sports fans. It recently became the only major live TV streaming service to carry the 19 Bally Sports regional sports networks. It's playing to win now, and that's how you play the game.
