Some investors turned their backs on growth stocks as economic woes deepened last year. It's important to remember, though, that today's economic troubles and stock market downturn are temporary. Certain growth stocks may suffer in this sort of context. But they'll be among the first to rebound or extend gains once things improve.
That's why it's never too early to look for smart growth stocks to buy now. I've got two in the healthcare sector that make great candidates to watch this year. One is a medical technology company that's set to report record earnings. The other is a biotech company with new product revenue and potential new product launches ahead. Let's take a closer look.
1. InMode
InMode (INMD 1.34%) makes radiofrequency devices used in various aesthetics and wellness procedures. They're used for skin remodeling, removal of unwanted hair, and the treatment of weak pelvic floor muscles -- and these are just a few examples.
The company benefits from the growth of the global non-invasive aesthetics treatment market. This market is set to progress at a compound annual growth rate of more than 15% through 2030, according to Grand View Research. That's as patients opt more and more for non-invasive treatments over surgical aesthetics procedures.
InMode already is seeing the results. The company recently offered a sneak peek at its fourth quarter and full year 2022 earnings -- and they've reached record levels. InMode's non-GAAP earnings per diluted share for the year should be in the range of $2.38 and $2.39. The company also expects non-GAAP gross margin of at least 83%. And revenue of at least $453.9 million represents a 26% increase from last year.
Importantly, InMode recently said momentum looks like it will continue into this year. And the company aims to grow through its own technology and potential acquisitions.
InMode shares haven't followed. Last year, they sank nearly 50%.
That leaves them trading at only 13 times forward earnings estimates. But this losing streak won't last forever considering InMode's growth. That's why it's a great idea to get in on this stock while it's cheap.
2. Axsome Therapeutics
Unlike InMode, Axsome Therapeutics (AXSM 2.79%) actually beat the bear market last year. The stock soared more than 100%. But there's still room for this growth stock to run. That's because the company is just at the start of its revenue story with two new products. And others may follow in the near future.
Last year, Axsome started selling Sunosi, a sleep disorder drug it bought from Jazz Pharmaceuticals. And it also launched an antidepressant it developed in-house. Though there's a lot of competition in the antidepressant space, Auvelity may stand out because it's fast acting. Auvelity could even reach blockbuster status by the end of the decade, analysts predict.
Now a look at the pipeline. And what's great here is that all of Axsome's programs are phase 2 or farther along. That means they've passed many of the drug development hurdles. And it also means that, if all continues to go well, product launches aren't too far away.
Two to be optimistic about in the near future are candidates for migraine and Alzheimer's disease agitation. Axsome aims to submit the migraine candidate for regulatory approval during the third quarter of this year. And the company recently reported positive date from a phase 3 trial of the Alzheimer's candidate.
All of this means it isn't too late to buy Axsome stock. The company's growth is just revving up -- we should see true acceleration once Axsome starts reporting a few quarters of earnings with its new treatments. And then potentially more growth as other products launch. So Axsome is definitely a stock to watch in 2023 – and beyond.
