Investors looking to round out their portfolios often benefit from a broader stock search. An easy way to do this is to look at earnings forecasts for the next year. Our picks for the top seven stocks for spectacular earnings growth next year include Vericel (VCEL), RH (RH) and Geo Group (GEO) – much less visible stocks than Meta (META), Amazon (AMZN), Tesla (TSLA) or other megacaps dominating the market.
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The Seven Best Stocks for Amazing Growth in Earnings
TG Therapeutics (TGTX): A commercial-stage biopharmaceutical company, TG sells a multiple sclerosis treatment called Briumvi, which has driven growth. On a per-share basis, analysts predict TG will see earnings grow 2,470% 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. Shares of TG Therapeutics show a Composite Score of 76 and RS Score of 96. It has risen 88% year-to-date in 2024. This includes a 37 % in the fourth quarter, despite weak earnings.
Vericel (VCEL): This biopharmaceutical company makes products for sports medicine and severe burns. Vericel has an uneven earnings history. However, it enjoys a favorable growth outlook, helping it join the list of best stocks. Analysts expect a strong fourth quarter to propel Vericel to positive earnings in the full year 2024, after three years of declining profits. They predict that Vericel's earnings per share will increase by 278% next year, while sales will increase by 23%. Vericel shares earn a composite rating of 81 and RS rating of 90. VCEL shares are up 60% so far this year. This includes a 36% revenue-driven increase this quarter. Trading volume is relatively light.
HE plays GE Vernova, Lumentum, Semtech
GE Vernova (GEV): Energy synoff General Electric is seeing end markets rebound. He has led growth across all business segments, earning GEV a spot on the Best Stocks list. William Blair analysts call Vernova stock a “top pick” for 2025 as artificial intelligence (AI) data centers consume huge amounts of energy. Wall Street expects Vernova's earnings to grow 164% per share this year next with 5% sales growth GE Vernova Shares boast a Composite Rating of 91 and an RS Rating of 97. It has nearly tripled since from its debut in March included a 35% gain in the fourth quarter amid strong earnings.
Lumentum (LITE): The company makes products for optical networking and laser applications, supporting the rapid data needs driven by artificial intelligence and machine learning. Lumentum is poised for a revenue rebound starting in the current quarter after three years of steep declines. Analysts project earnings will rebound 55% per share in the fiscal year ending in June. They expect a 136% increase in profits next year with a 28% increase in sales. Lumentum stock boasts a composite score of 75 and an RS score of 95. Year to date in 2024, LITE stock is up 59%. That includes a 30.5% gain this quarter alone amid a big loss in revenue.
Semtech (SMTC): Semtech supplies high-performance semiconductor products, increasing efficiency in AI data centers. Analysts expect Semtech's earnings per share to grow 134% next year, after a strong rebound in 2024. Semtech saw an earnings collapse in 2023. Sales are seen growing almost 5% this year and growing by 22% the following year. Semtech stock has a composite score of 86 and an RS score of 98. Semtech stock has nearly tripled in 2024 year to date, up 194%. This includes a 39% increase in revenue in the fourth quarter.
RH, GEO Join the list of best stocks
RH (RH): The retailer, formerly known as Restoration Hardware, taps into the high-end home furnishings market. It is poised to more than double earnings next year. Analysts predict EPS growth of 122% after three years of expected and actual declines. Revenue is seen rising 14% next year, up from an expected 5.6% gain in the current year ending in January. RH gave a good earnings outlook in December despite a challenging housing market. As a result, this rich retailer enters the list of amazing growth stocks. The RH stock shows a Composite Rating of 83 and RS Rating of 92. It holds a 42% gain in 2024 including a 22.5% increase this quarter.
Geo Group (GEO): Another newcomer to the list of best stocks, Geo owns and manages correctional and detention facilities. Private prison stocks could benefit from tougher immigration enforcement under President-elect Donald Trump. Analysts predict Geo's earnings will almost double next year, jumping 83%, after declines in 2023 and 2024. Sales are seen to rise 0.4% this year and grow 12.4% next year. Geo stock has a composite rating of 85 and RS rating of 98. It has more than doubled this year, rising 161%, after surging in November following Trump's US election win.
The universe of S&P 500, S&P 400 and S&P 600 stocks
A little background on IBD's process for picking the best stocks for amazing 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, quality names. lower, while effectively measuring the total US stock market.
We then limited the stocks on our Best Stocks list to those that show FactSet consensus ratings of Overweight or Buy, meaning analysts expect them to outperform industry peers. Next, we further earned the list, setting a double hurdle: The stock had to enjoy some of FactSet's strongest earnings growth estimates for the next fiscal year, while also earning strong IBD ratings, in terms of their composite assessment and RS assessment.
The top seven stocks that result in huge earnings growth are a completely different set than the Magnificent Seven stocks. At the same time, these stocks are worth a look as much as any Mag Seven stock, given their performance potential.
For more ideas on the best stocks to buy or watch, check out the IBD Stock Lists and other IBD content.
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