2 Supercharged Growth Stocks to Invest In Before the Next Bull Market

While there's no such thing as a perfect stock or a perfect investor, there's no shortage of intriguing businesses with likely paths forward to continued growth and returns in the future. Even as certain growth stocks remain depressed across a range of sectors relative to their all-time highs, the market has created generous tailwinds for many businesses with clear and compelling growth stories.  

Here are two such stocks that could present compelling long-term investment opportunities for investors with cash to put to work right now.  

1. Upstart 

Upstart (UPST 2.76%) continues to pursue its mission to change the way the lending industry operates. This multi-trillion-dollar space long relied on outdated means of assessing consumer creditworthiness, often using little more than the FICO score to determine whether to approve or deny people for loans.

This system left many potentially creditworthy people unable to access credit, despite having never defaulted on a credit product in their life. In fact, according to a study by Upstart, only 48% of Americans have access to prime credit, even though 80% haven't once defaulted on a credit product.  

Upstart recognized this gap in the lending market, and built a business that revolves around its artificial intelligence and machine learning platform to empower better lending decisions and expand the total addressable market of creditworthy consumers. The company doesn't fund most of the loans it processes. It has a growing network of lending partners like banks, credit unions, and other institutional entities that buy up the loans it processes, and it derives most of its revenue from related fees like referral fees. 

Instead of using only the FICO score, Upstart uses more than 1,500 data points to drive lending decisions. Eighty-four percent of all loans processed through Upstart's platform are done so on a completely automated basis, with no element of human involvement. The company has 99 banks signed up to its platform (as of the time of its first-quarter report), compared to 50 as of the same time a year prior. That's a roughly 100% increase on a year-over-year basis.  

The macro environment made the risk and cost of funding loans higher for Upstart's institutional partners and induced fewer people to apply for loans overall, factors which will continue to pose challenges for this business in the near term. However, the underlying power of the fintech's platform and its ability to constantly fine-tune to the environment at hand is driving greater accuracy and automation, and lending partners are clearly taking note. Investors with a long-term investing horizon may want to take a second look at this stock before it rockets higher, as its growth journey and potential look to be far from tapped out. 

2. Vertex Pharmaceuticals 

Vertex Pharmaceuticals (VRTX -0.06%) controls a sizable share of the cystic fibrosis treatment market, a space on track to be worth roughly $13 billion by 2030. The company is the only one with drugs commercialized that treat the underlying cause of the disease. Cystic fibrosis is an ailment that afflicts more than 160,000 people globally, and the company estimates that there are as many as 20,000 in North America, Europe, Australia, and New Zealand alone who could benefit from its existing portfolio of drugs but aren't taking them yet.

In short, not only does Vertex Pharmaceuticals have a foothold on a large total addressable market, but it hasn't come close to exhausting its growth potential. Its cystic fibrosis drugs, which belong to a class of drugs called CFTR modulators, aren't one-and-done treatments either. These drugs are helping patients live better and longer, but must generally be taken once every 12 hours to be most effective.

In 2022, Vertex raked in revenue of $9 billion on profits of $3.3 billion. Those figures represented increases of about 20% and 40% from the prior 12-month period. The company has generated operating cash flow of $4 billion in the trailing 12 months alone.  

Beyond the vast success of its cystic fibrosis franchise, Vertex Pharmaceuticals is looking to the future and further untapped opportunities within the rare disease drug space. Its current pipeline includes candidates that address Type 1 diabetes, sickle cell disease, and acute pain, several of which represent near-term commercialization opportunities in multi-billion-dollar addressable markets. This includes its CRISPR-based candidate exa-cel, which is under regulatory review in the U.S., U.K. and Europe, and could present a one-time functional cure for two rare blood disorders. There's a lot to like about this profitable business as it stands now, but the best may be yet to come.