Growth stocks have recovered their footing in early 2023 after a challenging 2022. The iShares Russell 1000 Growth ETF has tracked higher by 7% over this time frame, while the Vanguard Growth Index Fund is up a respectable 8.8% so far this year. Through the first two months of 2023, both of these growth bellwether indices beat the benchmark S&P 500.
Which equities are poised to profit most from this pattern reversal among growth stocks? Stocks that are rising on the strength of stronger foundations are always worth looking into. Following a significant shift to their core narrative, these three growth-oriented businesses are starting to heat up.
Sarepta Therapeutics
Sarepta Therapeutics (SRPT 19.24%) specializes in treating uncommon diseases. Currently, the business has three Duchenne muscular dystrophy (DMD) treatments that have received FDA approval in the United States (DMD). Due to the potential for a fourth FDA clearance, shares of Sarepta have increased by 59% over the last year. SRP-9001 is anticipated to be approved by the FDA for the therapy of ambulant DMD patients on May 29, 2023.
The big issue is what? This Roche-partnered drug, in Sarepta’s estimation, could reach peak revenues of upwards of $4 billion. Additionally, this indication has been demonstrated to have a very high entry barrier, with almost every experimental therapy failing in clinical trials. As a result, SRP-9001 has a built-in competitive moat and an extremely high business ceiling. According to bullish analysts, this biotech company still has 53% more room for growth.
Hims & Hers Health
An uncommon healthcare provider is Hims & Hers Health (HIMS 2.31%). Patients are linked up with qualified healthcare experts through its multi-speciality telehealth platform. Patients can obtain prescription treatments through the Hims & Hers Health digital portal for a variety of ailments, including sexual health, hair loss, dermatology, mental health, and primary care.
Hims & Hers Health has been rapidly gaining market share lately, despite the fact that the company’s cloud-based telehealth business strategy is by no means original. The company’s subscriber base has grown by 190% over the last two years, leading to a more than quadrupling of its annual web revenues during this time. Through its distinctive marketing campaign focusing on taboo conditions like sexual health and hair loss, Hims & Hers Health has been able to take market share away from established rivals.
The rising fundamentals of Hims & Hers Health have had a significant positive impact on the market price. The stock price of the business has soared by an impressive 120% in the last 12 months.
However, this speciality healthcare stock should have a lot more opportunity to grow in the years to come. In fact, Hims & Hers Health has only begun to penetrate the vast potential market.
MercadoLibre
South America‘s largest online retailer is MercadoLibre (MELI -0.93%). To draw new users to its platform and then keep them there, the company has also developed a fintech ecosystem that is quickly expanding. Along with other e-retailers, the company’s stock declined in 2022. But since the start of 2023, the equity price of MercadoLibre has increased by about 42%.
Why the sudden change in direction? The ongoing growth of e-commerce across Latin America presents significant business potential for MercadoLibre. Additionally, the business has developed a strong competitive advantage with the launch of its best-in-class shipping service, Mercado Envios, and integrated digital payments platform, Mercado Pago.
As a result, MercadoLibre should keep gaining market dominance quickly and fend off any potential rivals. The e-commerce behemoth’s long-term prospects appear promising thanks to that potent combination.
