There's a simple way to potentially grow your $1,000 into a whole lot more a few years from now. And that's by investing in a few top growth stocks. Some have already taken off after declining last year. But, in many cases, increases are just starting. And there's more to come.
Three great examples are Intuitive Surgical (ISRG 0.59%), Lululemon Athletica (LULU 1.31%), and Shopify (SHOP 1.11%). They've each climbed in the double digits so far this year. And for good reason. These companies have what it takes to keep revenue climbing -- and the share price should follow over time. With $1,000 you can invest in all three or decide to go all in on one. Let's take a closer look at these unstoppable stocks to buy now.
1. Intuitive Surgical
Intuitive is the global leader in robotic surgery by far. The company has nearly an 80% share of the market. And the good news is it's very likely to keep that leadership for a couple of reasons.
First, surgical robots are million-dollar purchases. So, hospital systems probably will stick with such an expensive investment rather than switching to another. Second, most surgeons train on Intuitive's flagship da Vinci platform -- it's likely they'll want to keep going with what they know best.
I also like Intuitive's revenue model, which favors recurrent revenue. That's because each da Vinci sold or leased requires new instruments and accessories for each procedure -- and regular maintenance. So Intuitive actually makes most of its revenue through selling instruments and accessories and service contracts. This is great because it means each da Vinci represents an ongoing revenue opportunity.
Finally, Intuitive has a solid earnings track record. It's grown revenue and profit into the billions of dollars. At the same time, it's also repurchased shares, showing confidence in its business. All of this makes me confident in Intuitive, too, and optimistic that the shares could climb further over the long haul.
2. Lululemon Athletica
Lululemon's brand strength has kept revenue climbing even during difficult times -- such as early pandemic days and today's higher interest rates. The company makes yoga-inspired clothing and athletic shoes -- and has built an online "sweatlife" community, offering yoga classes and tips.
The company's connection with its fans helped it reach the goals of a growth plan launched in the toughest of times -- right before the pandemic. Now, Lululemon is working on a new growth initiative. It aims to double annual revenue to $12.5 billion by 2026. To reach the goal, it plans on doubling its digital business and its men's business and quadrupling the international business.
Lululemon's recent earnings report gives investors reason to be optimistic. The company's total revenue climbed 24% to $2 billion and diluted earnings per share jumped 54% to $2.28. Lululemon also made gains in areas relevant to the growth plan. For example, men's revenue advanced in the double digits. And international revenue soared 60%.
Today, Lululemon shares trade for 31 times forward earnings estimates, down from about 40 a year ago. This looks very reasonable considering Lululemon's growth so far and progress toward its new goals.
3. Shopify
Shopify is another company that's grown revenue over time. That's thanks to its top position in a high-growth market: e-commerce. The e-commerce market is set to grow in the double digits throughout this decade, and Shopify should benefit.
The company offers a broad set of solutions to companies that want to build a presence online -- from website creation to tools that help owners market and manage a business. And the range of prices allows companies big and small to work with Shopify.
In recent times, earnings slumped as Shopify's expansion into logistics added to costs. But the company quickly took action, and the decision looks like it will offer Shopify the best of both worlds. Shopify sold its logistics business to Flexport -- and it will use Flexport as its official logistics provider.
Importantly, Shopify is growing in many key areas. In the most recent quarter, the company reported double-digit gains in gross merchandise volume, monthly recurring revenue, and gross profit dollars. And Shopify's new additions -- such as Shopify Bill Pay to pay vendors directly -- continue to strengthen the company's services.
All of this means growth is far from over at Shopify. And that should translate into share performance over time.
