Growth boosts valuation multiples, but it doesn’t always last forever. Companies that cannot maintain it are often penalized with large declines in market value, a lesson ingrained in investors who lost money in tech stocks during 2022.
The risks that can come from buying these assets is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. On that note, here are three growth stocks where the best is yet to come.
Datadog (DDOG)
One-Year Revenue Growth: +27.7%
Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ: DDOG) provides a software platform that helps organizations monitor and secure their cloud applications, infrastructure, and services.
Why Should You Buy DDOG?
- Customers view its software as mission-critical to their operations as its ARR has averaged 27.6% growth over the last year
- Prominent and differentiated software results in a top-tier gross margin of 80%
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
Datadog’s stock price of $133.74 implies a valuation ratio of 11.9x forward price-to-sales. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Coherent (COHR)
One-Year Revenue Growth: +18.6%
Created through the 2022 rebranding of II-VI Incorporated, a company with roots dating back to 1971, Coherent (NYSE: COHR) develops and manufactures advanced materials, lasers, and optical components for applications ranging from telecommunications to industrial manufacturing.
Why Does COHR Catch Our Eye?
- Market share has increased this cycle as its 16.6% annual revenue growth over the last two years was exceptional
- Exciting sales outlook for the upcoming 12 months calls for 25.9% growth, an acceleration from its two-year trend
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 69.9% annually
Coherent is trading at $316.25 per share, or 47.3x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
California Resources (CRC)
One-Year Revenue Growth: +15.1%
Operating some of California's most productive oil fields including Elk Hills and Belridge, California Resources (NYSE: CRC) explores for and produces crude oil, natural gas, and natural gas liquids from fields across California.
Why Do We Like CRC?
- Impressive 16.9% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Attractive asset base result in a stellar gross margin of 57.1%
- CRC is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $68.20 per share, California Resources trades at 13x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
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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.
