Two of the most well-known and beloved stocks on the market are Amazon and Tesla. Indeed, these are two of the so-called "Magnificent Seven" -- seven of the largest enterprises in the entire world. And if you bought shares of this duo three years ago, you're doing quite well as of June 27, gaining 88% and 33%, respectively.
However, a little-known spin-off is quietly crushing the S&P 500 and beating high-flyers like Amazon and Tesla since it went public less than two years ago. The stock may not have crossed the radar for many investors. But with household products in 36 categories that are sold at over 170 retailers worldwide, it's a brand name that's immediately recognizable to most U.S. consumers.
Image source: Getty Images.
I'm talking about SharkNinja (SN 2.54%), a company comprised of two multibillion-dollar household product brands. On the Shark side, there are vacuum cleaners as well as more cleaning appliances. And on the Ninja side, it has a portfolio of small kitchen appliances, such as blenders.
SharkNinja was spun off from China's JS Global in July 2023. And since that spin-off, shares have more than doubled in value, as the chart below shows.
Returns have already been quite good for SharkNinja shareholders during its short history as a publicly traded company. But management believes it has a winning business strategy that can create a lot of additional shareholder value over the long term. And after looking things over, I'm starting to think they may be right. Here's why.
SharkNinja: The "consumer problem solving" company?
SharkNinja is on a constant mission to launch new household appliances, whether in product categories that it already addresses or in new categories altogether. But the company starts with trying to solve consumer problems in product development.
According to management, SharkNinja has "Built a consumer problem-solving engine." Its plan is to "Scour ratings and reviews using proprietary software to find and understand opportunities to improve the consumer experience." In other words, the company uses software to determine what consumers like and dislike about their current products, and then designs new products based on these insights.
Ordinarily, I'd be tempted to dismiss these comments as typical managerial exaggeration. But SharkNinja's results speak for themselves. The company's net sales in 2024 were 49% higher than in 2022, and it expects at least an additional 11% year-over-year growth here in 2025.
One of SharkNinja's recent product launches particularly caught my eye. In 2021, the company estimated the home ice cream market to be worth $53 million. In 2022, its Ninja Creami machine generated net sales of $78 million.
In short, SharkNinja launched a new product, and sales exceeded the entire prior-year size of its market niche. This level of success likely didn't happen by accident. It may well be evidence of its "consumer problem-solving engine" in action.
Does SharkNinja stock have any more upside?
SharkNinja has generated nearly $5.7 billion in trailing-12-month revenue. That's significant from any angle. Long-term growth could become increasingly challenging for the company. After all, consumers don't replace home appliances every year. To the contrary, they want to buy things that last. Even if the brand stays strong in consumers' minds, growth might be hard to find as it saturates the market.
That said, continued growth shouldn't be impossible for SharkNinja. In 2023, management estimated its serviceable market to be worth about $40 billion and growing. Consider the fact that some of its top products enjoy 30% to 50% market share. Assuming more of its products can command similarly dominant shares of their chosen markets, SharkNinja could generate annual revenue of $10 billion or more.
Investors should also consider SharkNinja's improving fundamentals. Management likes to scale products for profitability, which gives it more cash to reinvest in the development of new products. Since going public, its gross margin and its operating margin have improved as hoped. And it's spending more on research and development (as a percentage of revenue).
SN R&D to Revenue (TTM) data by YCharts.
When considering its stellar history of growth, its improving business fundamentals, and its ongoing business opportunity, I'm inclined to say that SharkNinja stock is a buy. But there are a couple of things to be mindful of.
First, SharkNinja has $545 million in net debt as of the first quarter of 2025. Ideally, it would have more cash than debt, but this is the opposite situation. Second, even if the company's growth continues, it will likely slow. This is reflected in its 2025 guidance of 11% to 13% growth -- that's about 50% slower than its historical growth rate.
Still, SharkNinja seems to be solving consumer problems just like it intended. And if management ever expands beyond its current market, perhaps it can invigorate its growth rate more than what investors give it credit for today.
