3 Companies Growing Revenue Fast

Their 5-year revenue growth rates have beaten the S&P 500

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Aug 10, 2022
Summary
  • Novavax, Alibaba and Marvell Technology top the S&P 500 in terms of higher revenue growth rates.
  • The S&P 500 saw its aggregate trailing 12-month revenue rise by about 6.54% per annum over the past five years.
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S&P 500 stocks have posted average growth of 6.54% in annual total revenue from 2017 to 2021. The benchmark index for the U.S. stock market closed at 4,122.47 on Tuesday, up nearly 70% over the past five years through Aug. 9.

Thus, investors may want to consider the three stocks listed below, as they have outperformed the S&P 500 in terms of higher five-year revenue growth rates. A company's history of growing sales is no guarantee of its future, but historically, rising sales are a powerful catalyst for higher stock prices.

Novavax

The first stock to make the cut is Novavax Inc. (

NVAX, Financial), a Gaithersburg, Maryland-based biotech company that develops vaccines to prevent serious infectious diseases and meet public health needs.

The company has seen dramatic revenue growth over the past five years, with an average increase of 7.6 times per year. Revenue improved from $31 million in 2017 to $1.15 billion in 2021.

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The share price is up 105.51% over the past five years, closing on Tuesday at $40.28 for a market cap of $3.15 billion and a 52-week range of $34.88 to $277.80.

Novavax shares have outperformed Alkermes PLC (

ALKS, Financial), whose shares were down 50.7%, and Denali Therapeutics Inc (DNLI, Financial), whose shares were up 74.41% over the same period.

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Novavax does not pay dividends.

GuruFocus has given the company a rating of 4 out of 10 for financial strength, 3 out of 10 for profitability and 8 out of 10 for growth.

Wall Street sell-side analysts issued a median recommendation rating of overweight for the stock and have established an average target price of $125.83 per share.

Vanguard Group Inc., BlackRock Inc. and Russell Investments Group Ltd. are among the company's top institutional shareholders.

Alibaba

The second company that qualifies is Alibaba Group Holding Ltd. (

BABA, Financial), a Chinese internet retail giant.

The company has experienced strong revenue growth over the past five years, with an average increase of 36.21% per year. Revenue increased from $39.61 billion for the fiscal year ended March 2018 to $134.45 billion for the fiscal year ended March 2022.

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The stock is down 39.89% over the past five years, closing at $91.19 on Tuesday for a market cap of $241.43 billion and a 52-week range of $73.28 to $198.45.

The shares of Alibaba underperformed JD.com, Inc. (

JD, Financial), whose shares were up 23.8%, and Pinduoduo Inc. (PDD, Financial), whose shares were up 77.3% over the same five-year period.

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Alibaba does not pay a dividend.

GuruFocus has given the company a rating of 7 out of 10 for financial strength, 9 out of 10 for profitability and 10 out of 10 for growth.

Wall Street sell-side analysts issued a median recommendation rating of buy for the stock and have established an average target price of approximately $152.68 per share.

The Vanguard Emerging Markets Stock Index Fund is the company's top fund holder with 7.58% of shares outstanding. Vanguard Total International Stock Index Fund is the second-largest shareholder at 6.95%, while iShares Core MSCI Emerging Markets ETF follows in third place with 4.84%.

Marvell Technology

The third company that qualifies is Marvell Technology Group Ltd. (

MRVL, Financial), a Wilmington, Delaware-based global semiconductor company focusing on analog, mixed and digital signal processing, as well as embedded and standalone integrated circuits.

The company has seen very good sales growth over the past five years, with an average increase of 18.36% per year. Revenue increased from $2.41 billion for the fiscal year ended January 2018 to $4.46 billion for the fiscal year ended January 2022.

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The share price is up 240.6% over the past five years, closing at $51.39 on Tuesday, giving it a market cap of $43.57 billion and a 52-week range of $41.07 to $93.85.

The shares of Marvell Technology beat NXP Semiconductors NV (

NXPI, Financial), whose shares were up 52.44%, and Microchip Technology Inc, (MCHP, Financial), whose shares were up 65.45% over the same period .

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Marvell Technology is currently paying quarterly dividends. On Sept. 2, it will pay a quarterly dividend of 30.1 cents per common share, which will be an annual increase of 37.44%. The payment leads to a trailing 12-month dividend yield of 1.44% and a forward dividend yield of 1.77%. The S&P 500 dividend yield was 1.53% at the time of writing.

GuruFocus has given the company a rating of 5 out of 10 for financial strength, 6 out of 10 for profitability and 7 out of 10 for growth.

Wall Street sell-side analysts issued a median recommendation rating of buy for the stock and have established an average target price of $78.31 per share.

Among the top fund owners, Vanguard Group has the largest stake with 11.59% of outstanding shares. BlackRock has the second-largest holding with 8.08%, while Dodge & Cox is third with 5.70%.

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure
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