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These Are 5 Of The Fastest Growing Stocks On The Planet

July 28
11:03 2021

For over 12 years, growth stocks have been the talk of Wall Street — and with good reason. Persistently low lending rates have allowed fast-growing companies abundant access to cheap capital that they’ve been able to use to hire new employees, acquire other businesses, and innovate for the future. With the nation’s central bank standing firm on its monetary policy, at least in the near-term, growth stocks should continue to thrive.

Of course, not all growth stocks are created equally. The following five companies are projected by Wall Street to be some of the fastest-growing stocks on the planet over the next four or five years, assuming analysts’ sales projections (per FactSet) come to fruition.

Snowflake: Implied five-year sales growth of 819%

Among cloud stocks, you’d struggle to find a company with a persistently higher annualized growth rate than Snowflake (NYSE:SNOW). After bringing in $592 million in full-year sales in fiscal 2021, Wall Street is looking for the company to deliver $5.44 billion in annual sales in fiscal 2026.

What really has Wall Street excited are Snowflake’s plain-as-day competitive advantages. Most notably, its cloud data-warehousing solutions are layered atop the most-popular infrastructure storage solutions. Whereas it can be difficult for businesses to share data that’s stored on competing cloud service providers, this sharing of information is seamless for Snowflake’s customers.

Snowflake also shunned the subscription-based operating model in favor of a pay-as-you-go model. By charging its clients for the amount of data stored and the number of Snowflake Compute Credits used, the company is making its pricing transparent and potentially more cost-effective for users.

While there’s no question Snowflake is one of the fastest-growing stocks on the planet, where the company’s stock should be valued is debatable. Though some premium is merited for such consistently high growth rates, I’m not so sure paying 71 times sales for this year makes sense for a company that’s still many years away from profitability. There may not be significant downside here, but I also fail to see how this valuation stretches much further to the upside.

Continue Reading at The Motley Fool

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