What makes a true market leader? From a fundamental perspective, companies with extraordinary earnings and sales growth that are consistently taking market share from the competition certainly fit the bill, as do businesses that are leaders in their respective industries. Another way to look at market leadership is to identify stocks in strong uptrends that might signify institutional buying from mutual funds, banks, and other sophisticated investors.
Given the big pullback in growth stocks that occurred earlier this year, it’s been quite interesting to see which companies are bouncing back the quickest. Several standout stocks have already resumed an uptrend and are displaying incredible relative strength in the growth space, which means that savvy investors should take notice. Let’s take a look at 3 growth stocks that are displaying market leadership at this time.
1. Shift4 Payments
This stock has rallied over 17% in April and hit new all-time highs last week, which is worth noting since many of the most popular growth stocks are still well off of their highs. Shift4 Payments (NYSE:) is a leading provider of integrated payment processing and technology solutions. It’s a popular name in the payments space because it offers technology that connects both e-commerce and brick-and-mortar merchants with tons of different back-end payment processors.
This company’s technology is used to power over 350 software providers in a variety of industries. The stock is also a solid reopening play since many of its clients are in sectors that got hit hard by the pandemic, including restaurants and hotels. Shift4 Payments has seen a recent surge in transaction volume including its recently reported March end-to-end payment volume of $3.3 billion, up 40% from February and 82% year-over-year. It’s a unique growth stock that stands out given its recent market strength, which is a big reason why investors should have it on their shopping lists going forward.
Another growth stock that has bounced back very quickly from the recent bout of market weakness is Snapchat. This is a company that has created a unique social media platform to help people communicate with short videos and images. Each one of the short videos or images captured in the application is known as a Snap (NYSE:), and Snapchat is constantly encouraging its users to create and contribute more content with its unique camera filters.
When you think about how advertising has moved online, it’s easy to recognize the potential of a company with a big social media platform that continues to grow at a rapid pace. Snapchat has developed a loyal following, including 265 million Daily Active Users and over 5 billion snaps created every day on average. Last quarter, the company posted 20% year-over-year growth in daily active users and saw its revenue increase 62% year-over-year to $911 million. Consider the upside potential here if Snapchat finds new ways to monetize its platform or gets acquired in the coming months. The stock is up over 16% in April and is worth a look during pullbacks or periods of consolidation.
It’s hard to deny that Square (NYSE:) has been one of the market leaders in growth over the past year, which is why it’s a stock that should be one of the first options on your shopping list. Square has rallied 14% in April and is an intriguing option in the fintech space for several reasons. As a company that provides payment and point-of-sale services to merchants, Square is well-positioned to benefit from the widespread shift towards electronic payments. The company’s Cash App is also an interesting component of its business, as it offers a person-to-person payment network that helps consumers handle their financial transactions with ease.
The company reported Q4 net revenue of $3.16 billion, up 141% year-over-year, and also recently announced that after one year of COVID-19 the share of cashless businesses has more than doubled. That is exactly the type of statistic that shareholders love to hear. It’s also interesting to note that Square offers investors exposure to cryptocurrency, given that the company purchased $170 million in bitcoin back in February of this year. The bottom line here is that Square is a hyper-growth company with a lot working in its favor, which is why it’s a stock that continues to be a market leader.