The best-performing stocks typically have robust sales growth, increasing margins, and rising returns on capital, and those that can maintain this trifecta year in and year out often become the legends of the investing world.
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 with room for further growth.
KLA Corporation (KLAC)
Five-Year Return: +524%
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ: KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
Why Are We Backing KLAC?
- Market share has increased this cycle as its 15.2% annual revenue growth over the last five years was exceptional
- Superior product capabilities and pricing power are reflected in its best-in-class gross margin of 61%
- Robust free cash flow margin of 30.5% gives it many options for capital deployment
KLA Corporation is trading at $1,874 per share, or 37.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
e.l.f. Beauty (ELF)
Five-Year Return: +113%
Short for "eyes, lips, face", e.l.f. Beauty (NYSE: ELF) is a developer of high-quality beauty products at accessible price points.
Why Are We Fans of ELF?
- Annual revenue growth of 45.2% over the past three years was outstanding, reflecting market share gains
- Earnings per share grew by 38.2% annually over the last three years, massively outpacing its peers
- Free cash flow margin increased by 12.2 percentage points over the last year, giving the company more capital to invest or return to shareholders
At $60.95 per share, e.l.f. Beauty trades at 19.3x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
American Express (AXP)
Five-Year Return: +105%
Recognizable by its iconic green logo and the slogan "Don't leave home without it," American Express (NYSE: AXP) is a global payments company that issues credit and charge cards, processes merchant transactions, and offers travel and lifestyle benefits to consumers and businesses.
Why Should You Buy AXP?
- Annual revenue growth of 15.5% over the past five years was outstanding, reflecting market share gains this cycle
- Share buybacks propelled its annual earnings per share growth to 21.4%, which outperformed its revenue gains over the last five years
- ROE punches in at 33%, illustrating management’s expertise in identifying profitable investments
American Express’s stock price of $316.24 implies a valuation ratio of 17.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
