Finding the right stocks for your portfolio and letting them grow your investment takes time and patience. Not all stocks will be winners, and you will need to trim your portfolio from time to time.
However, diversifying your cash into different stocks and sectors can help you benefit from multiple forms of growth while maximizing your opportunities for favorable returns over the long run.
If you have $1,000 to invest and are looking for top growth stocks to put part or all of that amount into, here are two contenders to consider.
1. Intuitive Surgical
Intuitive Surgical (ISRG 0.63%) has remained a dominant force in the surgical robotics market for decades. With its flagship da Vinci surgical robotics systems, it controls the lion's share of the value generated in this market, although it's worth noting that most of Intuitive Surgical's revenue doesn't actually come from system sales.
In the first half of 2024, Intuitive Surgical reported total revenue just shy of $4 billion, a 13% increase from the same period in 2023. Of that total, $2.4 billion came from instruments and accessories that accompany its systems, and must be replaced regularly. Next was revenue from its actual sales or sales-type leases of systems, totaling $866 million.
The third driver of revenue was its services segment, which includes service contracts that Intuitive Surgical signs with clients who purchase its systems. Its services segment brought in total revenue of about $631 million in the first six months of 2024.
Intuitive Surgical has a steady history of profitability. Its net income of approximately $1.1 billion in the first half of 2024 was up 37% from the same six-month period in 2023.
In just the second quarter of 2024, the company placed 11 more da Vinci systems for clients than in the year-ago period, but procedure volume was up 17% year over year. And, its installed base of systems was up 14% from the year-ago period to 9,203 systems.
The global surgical robotics market is expected to expand at a double-digit compound annual growth rate of approximately 16% between 2024 and 2032. With Intuitive Surgical's massive footprint in this space and surgical systems that are used from everything from general surgery to pediatric surgery to cardiac surgery, there's plenty of room for this business to run.
Intuitive Surgical has had to deal with some headwinds in recent years. These include fluctuations and declines in procedures in key markets during the pandemic, as well as the subsequent economic fallout that many of its clients like hospitals are contending with that have driven some to opt for leases over direct purchase of systems.
Still, overall procedure volume and profitability remain on track. Investors searching for a resilient business to put some cash into might find that Intuitive Surgical looks like a welcome place to park some capital.
2. e.l.f. Beauty
E.l.f. Beauty (ELF 0.52%) is known for its affordable, cruelty-free beauty products and popular social media campaigns that frequently feature influencers, actors, and other celebrities to market its products. It features a family of brands that sell skincare and makeup, all for an attainable price to the end consumer.
These brands include flagship segments e.l.f. Cosmetics and e.l.f. Skin. Other brands in the e.l.f. family include clean skincare brand Naturium, plant-powered beauty brand Well People, and skincare brand Keys Soulcare, which is a joint venture with singer and songwriter Alicia Keys.
e.l.f. Beauty sells its products online on its own website, but many of its sales are generated through partnerships with major retailers including Walmart, Ulta Beauty, and Target. These three retailers alone comprised 58% of e.l.f. Beauty's total sales in the last fiscal year.
In e.l.f. Beauty's fiscal 2024, which ended on March 31, net sales rose 77% from the prior year to more than $1 billion, while gross margin increased 330 basis points to 71%. The company is profitable, with net income in its fiscal 2024 totaling $127.7 million under generally accepted accounting principles (GAAP). It also closed out the year with about $108 million in cash on its balance sheet, and generated roughly $71 million in operating cash flow in the last 12 months.
One of its key brands, e.l.f. Cosmetics, gained market share for the fifth year in a row in fiscal 2024, while the company controls the first or second market position in 18 core cosmetic categories. The company also grew its overall market share 305 basis points in fiscal 2024 and is the now second-largest brand in the mass cosmetics category, controlling a nearly 13% share of this space, more than either Maybelline or L'Oreal Paris.
With the average price point for e.l.f.'s products running around $5 to $6, there's plenty of room to capture consumer dollars even when wallets are constrained in a challenging economic environment. The company's balance sheet is looking good and its market share is only expanding, while its overall addressable market is consistently growing.
Also consider that the beauty and personal care markets are on track to hit a valuation of around $650 billion this year alone -- and that makes e.l.f. Beauty an increasingly attractive option to capitalize on this growth trajectory.
