3 Market-Beating Stocks with Impressive Fundamentals
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.
It’s clear there’s a strong connection between sustained earnings growth and hall-of-fame returns. Keeping that in mind, here are three market-beating stocks with room for further growth.
AppLovin (APP)
Five-Year Return: +694%
Sitting at the crossroads of the mobile advertising ecosystem with over 200 free-to-play games in its portfolio, AppLovin (NASDAQ:APP) provides software solutions that help mobile app developers market, monetize, and grow their apps through AI-powered advertising and analytics tools.
Why Will APP Outperform?
- Market share has increased as its 29.2% annual revenue growth over the last two years was exceptional
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
AppLovin’s stock price of $490.69 implies a valuation ratio of 20.1x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
CSW (CSW)
Five-Year Return: +110%
With over two centuries of combined operations manufacturing and supplying, CSW (NYSE:CSW) offers special chemicals, coatings, sealants, and lubricants for various industries.
Why Is CSW a Top Pick?
- Annual revenue growth of 21.2% over the past five years was outstanding, reflecting market share gains this cycle
- Earnings per share grew by 20.5% annually over the last two years and trumped its peers
- CSW is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its rising cash conversion increases its margin of safety
At $294.16 per share, CSW trades at 26.2x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
American Superconductor (AMSC)
Five-Year Return: +148%
Founded in 1987, American Superconductor (NASDAQ:AMSC) has shifted from superconductor research to developing power systems, adapting to changing energy grid needs and naval technology requirements.
Why Will AMSC Beat the Market?
- Annual revenue growth of 43.7% over the past two years was outstanding, reflecting market share gains this cycle
- Free cash flow turned positive over the last five years, indicating the company has achieved financial self-sustainability
- Rising returns on capital show the company is starting to reap the benefits of its past investments
American Superconductor is trading at $40.75 per share, or 42.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.
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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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
