| | | Hunting For Magnificent Growth Next Year? Check Out These 7 Stocks.
 Investors looking for a portfolio boost would do well to widen the search aperture. The best stocks for earnings growth can come in all sizes. (Shotprime Studio - stock.adobe.com) Generated by AI
Investors looking to supercharge their portfolios often benefit from a broader stock search. One simple way to do that is to look at year-ahead earnings forecasts. Our picks for the seven best stocks for magnificent earnings growth next year include Lumentum ( LITE) and Semtech ( SMTC) — stocks far less obvious than Meta ( META), Amazon ( AMZN), Tesla ( TSLA) or other megacap names that dominate the market.
Seven Best Stocks For Magnificent Earnings Growth
TG Therapeutics ( TGTX): A commercial-stage biopharmaceutical company, TG sells a multiple sclerosis treatment called Briumvi, which has been driving growth. On a per-share basis, analysts forecast TG will see a 1,870% surge in earnings in 2025, recovering from a sharp decline this year. The company has made a recent turn to profits. Sales are seen growing 41% in 2024 and 64% in 2025. TG Therapeutics stock shows a Composite Rating of 75 and RS Rating of 96. It has surged 99% so far this year. Shares have recovered from an earnings miss tumble in November, not far from highs.
Alcoa ( AA): The aluminum company is returning to growth after a challenging period. In October, Alcoa delivered its second straight quarter of positive earnings after a seven-quarter slump. Analysts expect Alcoa to swing to positive earnings in full-year 2024, followed by a 318% leap next year. Sales are seen rebounding 10% this year and growing 6.2% next year, after the company completed its Alumina acquisition in August. Alcoa stock holds a Composite Rating of 80 and RS Rating of 93. It has advanced 36% so far this year as investors digest improving fundamentals. Shares set a new high set in late November. They remain far below all-time highs.
Biopharma Vericel, AI Medtech Play RadNetVericel ( VCEL): This biopharmaceutical company makes products for sports medicine and severe burns. Vericel has an uneven profit track record. However, it enjoys a favorable growth outlook. Analysts expect a strong fourth quarter to push Vericel to positive earnings in full-year 2024, after three years of earnings declines. Analysts project Vericel earnings per share will vault 277% next eyar, as sales jump 23%. Vericel stock earns a Composite Rating of 78 and RS Rating of 87. VCEL stock is up 59% so far this year and not far from November highs. Trading volume is on the lighter side.
RadNet ( RDNT): Forecasts call for the medical imaging company to grow earnings per share 179% next year, following a big rebound in 2024. RadNet saw earnings crumble in 2022 and 2023. Analysts see sales rising 12% in 2024 and 8% next year. RadNet stock earns a Composite Rating of 80 and RS Rating of 93. It soared in November on strong earnings and has rocketed 128% so far this year. RadNet's DeepHealth operating system integrates advanced AI (artificial intelligence) with imaging systems. RadNet trades in relatively low volume.
GE Vernova ( GEV): The once-embattled General Electric energy spinoff is seeing end markets recover. It has guided growth across business segments, earning GEV a place on the best stocks list. GE Vernova missed Q3 earnings views but reaffirmed full-year 2024 guidance. GEV popped nearly 4% on Thursday on a positive initiation note. Analysts called it a "proxy for accelerating demand for electricity," with energy-intensive AI data centers a growth opportunity. Analysts, on average, expect earnings to boom 175% per share next year on 6% sales growth. GE Vernova stock flourishes a Composite Rating of 90 and RS Rating of 97. It has nearly tripled since its March debut. Shares trade not far from the November high.
Semtech, Lumentum Round Out Best Stocks List
Lumentum ( LITE): The company makes products that enable optical networking and laser applications. Lumentum is poised for an earnings comeback starting in the current quarter after three years of hefty declines, earning it a spot on the best stocks list. Analysts project earnings will recover 55% per share for the full fiscal year, which ends in June. They expect a further 136% earnings boom the following year on a 28% sales surge. Lumentum stock flourishes a Composite Rating of 77 and RS Rating of 97. Shares made a new high on Wednesday. They surged in November after a far narrower-than-expected quarterly loss. In 2024 so far, LITE stock has rocketed 77%.
Semtech ( SMTC): Semtech supplies high-performance semiconductors and other products for the infrastructure, industrial and consumer markets. Analysts expect Semtech earnings per share to boom 130% next year, after a strong comeback in 2024. Semtech saw an earnings collapse in 2023. Sales are seen rising almost 5% this year and jumping 22% next year. Semtech stock holds a Composite Rating of 86 and RS Rating of 98. It has more than tripled so far this year, up 209%. SMTC stock struck a new high on Wednesday but slid on Thursday after a proposed stock offering. Semtech stock has more than tripled in 2024 to date, vaulting 207%. That includes a 45% surge in November amid a quarterly earnings beat.
Universe of S&P 500, S&P 400 and S&P 600 StocksA little background on IBD's process to select the best stocks for magnificent earnings growth:
We began our screening process with the S&P Composite 1500 index, which aggregates the S&P 500, S&P MidCap 400 and S&P SmallCap 600 companies. We chose this index, in part, because it avoids less-liquid, lower-priced and lower-quality names, while efficiently measuring the total U.S. stock market.
Then we limited the stocks on our best stock list to those showing FactSet consensus ratings of overweight or buy, which means analysts expect them to outperform industry peers. Next we further winnowed down the list, setting up a double hurdle: The stocks had to enjoy some of the strongest FactSet earnings growth estimates for the following fiscal year, while also earning high IBD ratings, in terms of their Composite Rating and RS Rating.
The resulting seven best stocks for outsize earnings growth are a quite different set from the Magnificent Seven stocks. At the same time, these stocks are worth watching as much as any of the Mag Seven stocks given their outperformance potential.
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