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Growth stocks climbed 30% in the last year, as represented by their benchmark ETF, SPDR Portfolio S&P 500 Growth ETF ( SPYG ). Biotechnology companies led gains, with names like Sera Prognostics, Inc. and EyePoint Pharmaceuticals, Inc. notching more than 500% gains over the past year.
The data below are current as of Feb. 9, 2024.
Key Takeaways
- Growth stocks are companies with the potential for above-average growth in revenues and earnings, often because they operate in emerging industries or have unique products or services that give them a competitive advantage.
- Instead of paying dividends, growth companies typically reinvest their earnings back into the business to fuel further growth.
- While these companies have the potential for high returns, they also face more volatility, making these investments higher risk.
- Sector/Industry: Biotechnology
- Price: $8.49
- Market Cap: $0.3 billion
- 1-Year Total Return: 613%
In December, Sera Prognostics, a health diagnostics company focused on improving maternal and neonatal health, announced that its study on pregnancy biomarker information for preterm birth risk assessment would end early because it met its efficacy endpoints sooner than expected.
- Sector/Industry: Biotechnology
- Price: $28.80
- Market Cap: $1.4 billion
- 1-Year Total Return: 591%
EyePoint Pharmaceuticals is a clinical-stage company focused on developing and commercializing therapeutics for serious retinal diseases, leveraging its proprietary technology for sustained intraocular drug delivery. In December, the stock soared 200% after the company announced successful results from a trial of its new treatment for wet age-related macular degeneration, or wet-AMD.
According to EyePoint, the study met its primary endpoint, as well as key secondary endpoints, showing it works as well as the current treatment but requires fewer doses. This breakthrough could make it easier and safer for patients to manage their condition, and the company is now planning to move to more advanced trials to further prove its effectiveness.
- Sector/Industry: Beverages, non-alcoholic
- Price: $3.81
- Market Cap: $0.2 billion
- 1-Year Total Return: 542%
Safety Shot Inc.—previously Jupiter Wellness Inc.—acquired GBB Drink Lab Inc.’s assets, including the blood alcohol detox drink Safety Shot, in August 2023, pivoting its business model to focus on the drink for future revenue.
Safety Shot is a patented detox beverage designed to accelerate the detoxification process from alcohol, offering a quicker recovery compared to traditional remedies and
helping to reduce hangovers. The market has embraced this niche product and its robust social media campaign, propelling Safety Shot’s stock to an impressive performance over the past year.
- Sector/Industry: Biotechnology
- Price: $43.21
- Market Cap: $2.3 billion
- 1-Year Total Return: 542%
Vera Therapeutics is a biotechnology company focused on treatments for serious immunological diseases. In January, Vera’s stock soared 155% after it reported encouraging outcomes from a clinical trial for participants with IgA nephropathy (IgAN) who were treated with the drug atacicept.
The data support atacicept’s potential as a transformative treatment for IgAN, also known as Berger’s disease, a kidney autoimmune disease.
- Sector/Industry: Software, infrastructure
- Price: $32.20
- Market Cap: $1.3 billion
- 1-Year Total Return: 456%
GigaCloud Technology’s platform is a full-stack solution for large parcel retailers and e-commerce entities globally, streamlining product discovery, payments, and logistics. The platform connects manufacturers, mainly in Asia, with resellers in key markets like the U.S., U.K., Germany, and Japan, facilitating efficient cross-border transactions and offering a full logistics package from the manufacturer to the customer.
The company’s stock surge since November 2023 can be attributed to its strong financial performance, with a significant year-over-year revenue increase and improved profitability in the third quarter of 2023. The company reported a notable rise in active sellers and buyers on its platform and a substantial increase in spending per active buyer, demonstrating robust engagement and marketplace growth.
- Sector/Industry: Financial services
- Price: $15.63
- Market Cap: $3 billion
- 1-Year Total Return: 438%
CleanSpark describes itself as “America’s Bitcoin Miner,” owning and operating 3.2 million square feet of low-carbon mining centers located in Georgia and New York. The stock has seen a surge over the past year, tracking the strong performance in Bitcoin prices.
How We Selected the Best Cheap Growth Stocks
We selected these growth stocks based on their stock price appreciation over the past year. We only listed companies that are trading under $50 per share and are listed on the Nasdaq or the New York Stock Exchange (NYSE).
Growth stocks are companies that focus on revenue growth over other metrics. They typically use capital gained from operations to reinvest into the company rather than giving investors dividend payments, as most value companies will focus on. Because of the increased attention growth companies put towards growing revenue, these stocks can be more volatile than other similar companies.
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As of the date this article was written, the author does not own any of the above stocks.