Stocks that outperform the market usually share key traits such as rising sales, expanding margins, and increasing returns on capital. The select few that can do all three for many years are often the ones that make you life-changing money.
Long story short, there is a near-perfect correlation between consistent earnings growth and huge winners. Keeping that in mind, here are three market-beating stocks that deserve a spot on your list.
Thermon (THR)
Five-Year Return: +174%
Creating the first packaged tracing systems, Thermon (NYSE: THR) is a leading provider of engineered industrial process heating solutions for process industries.
Why Are We Positive On THR?
- Annual revenue growth of 12.4% over the past five years was outstanding, reflecting market share gains this cycle
- Operating margin improvement of 8.8 percentage points over the last five years demonstrates its ability to scale efficiently
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 46.1% over the last five years outstripped its revenue performance
Thermon’s stock price of $54.01 implies a valuation ratio of 25.3x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Super Micro (SMCI)
Five-Year Return: +600%
Founded in Silicon Valley in 1993 and known for its modular "building block" approach to server design, Super Micro Computer (NASDAQ: SMCI) designs and manufactures high-performance, energy-efficient server and storage systems for data centers, cloud computing, AI, and edge computing applications.
Why Will SMCI Outperform?
- Annual revenue growth of 74.1% over the past two years was outstanding, reflecting market share gains this cycle
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 45.5% annually
- Free cash flow profile has moved into positive territory over the last five years, showing the company is at an important crossroads
Super Micro is trading at $27.42 per share, or 11x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Houlihan Lokey (HLI)
Five-Year Return: +137%
Founded in 1972 and known for its expertise in complex financial situations, Houlihan Lokey (NYSE: HLI) is a global investment bank specializing in mergers and acquisitions, capital markets, financial restructurings, and valuation advisory services.
Why Is HLI a Top Pick?
- Annual revenue growth of 20% over the last two years was superb and indicates its market share increased during this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 34.9% annually, topping its revenue gains
- Balance sheet strength has increased this cycle as its 34.3% annual tangible book value per share growth over the last two years was exceptional
At $159.94 per share, Houlihan Lokey trades at 20x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
