3 Hot Growth Stocks to Buy in 2024 and Beyond

Many people may not be aware that investing can help you build long-lasting wealth. If you invest in the right growth stocks that have the potential to grow their earnings and cash flows over years or even decades, then you should see your investment portfolio grow in tandem. It would help if you have the patience and fortitude to hold on to these long-term winners and not waver even when there is market volatility. Most importantly, you need to identify the right types of stocks to buy in the first place.

A simple rule of thumb is to look for companies with dominant market positions, a robust business model, and enjoying steady increases in revenue, profits and/or free cash flow. The improving financial situation is proof that the business is growing steadily, and investors must also look for sustainable tailwinds that will continue to boost the business’s prospects. Tailwinds and catalysts are important because they play a crucial role in allowing the company to continue to grow, making the stock a compelling buy not just for this year, but for many years down the road.

Here are three solid growth stocks that you can include in your growth stock portfolio.

Image source: Getty images.

1. MercadoLibre

MercadoLibre (MELI -2.56%) is a major e-commerce and financial technology player in Latin America. Its platform offers e-commerce, payment services, loans, investments, logistics fulfillment, advertising and third-party content streaming.

MercadoLibre has seen solid growth in both its top and bottom lines over the years. Revenue doubled from $7.1 billion in 2021 to $14.5 billion in 2023, while operating income more than quadrupled over the same period to $1.8 billion. Net income grew more than tenfold, from just $83 million in 2021 to $987 million in 2023. The e-commerce player also saw its free cash flow grow thirteen-fold from to $356 million to $4.6 billion over the same period.

The company’s momentum continued strong in the first half of 2024, as revenue rose 38.9% year over year to $9.4 billion. The Mercadolibre platform is seeing more users and active buyers increasing gross merchandise value (GMV) and total payment volumes (TPV). The number of unique active shoppers increased from 62 million to 73 million in a year, while GMV increased 20.4% year-over-year to $24 billion. POS on the MercadoLibre platform climbed 35.1% year-over-year to $87.1 billion as the number of payment transactions increased from 3.3 billion a year ago to 5.1 billion.

These figures are impressive and a testament to the e-commerce player’s strong market position. Net income for the first half of 2024 rose 89% year-over-year to $875 million, close to last year’s net income, while free cash flow rose 48.1% from year over year to $3.1 billion.

MercadoLibre continues to grow its presence with the opening of a fulfillment center in Texas to deliver inventory from US sellers to buyers in Mexico. The company expanded its clothing and beauty assortment and launched premium brands such as Hugo Boss and Kerastase to cater to a wider customer base. In early July, its advertising arm partnered with Disney+ to run programmatic video ads in its first such external partnership.

On the fintech side, MercadoLibre plans to apply for a digital banking license in Mexico to expand its business. The future looks bright for the business in 2024 and beyond, and investors should feel bullish about the e-commerce outfit’s prospects.

2. Atlasian

Atlasian (TEAM -0.36%) is a software-as-a-service company with a platform that provides its customers with service and work management tools that help their teams organize and improve work efficiency. The company saw impressive growth from fiscal 2021 (ended June 30) to fiscal 2023, with revenue rising from $2.1 billion to $3.5 billion.

Gross profit improved from $1.8 billion to $2.9 billion over the same period, with gross margin remaining above 82% over the three fiscal years. The business generated consistent positive free cash flow from fiscal 2021 through 2023, with an average free cash flow margin of nearly 29%.

In fiscal 2024, that growth continued, with the company reporting a year-over-year revenue increase of 23.3% to $4.4 billion. Gross margin remained high at 81.6%, gross profit increased 22.6% year-over-year to $3.6 billion. Free cash flow fared even better, rising 68% year-over-year to $1.4 billion.

Atlassian also reported a higher number of customers contributing more than $1 million in revenue, up 48% year-over-year from 353 to 524 for fiscal 2024. That number is more than five times higher than the 104 customers in fiscal year 2020 and shows the efficiency of the company. to induce customers to pay more for its services. And as Atlassian ramps up its cloud roadmap, the number of customers with more than $10,000 in annual recurring revenue (ARR) from the cloud grew from 38,726 in FY2023 to 45,842 in FY2024.

While these numbers are encouraging signs for the company, they may only be the tip of the iceberg in terms of future potential. Management has identified a total addressable market of $67 billion, comprising the three areas of software development, service management and labor management. To drive its next stage of growth, management revealed during the recent Investor Day that it will focus on enterprise (i.e. data center migration to the cloud), service management and artificial intelligence.

With a solid strategy and a compelling value proposition for its customers, Atlassian looks set to continue its meteoric growth streak.

3. Okta

Okta (OKTA -3.02%) is an identity management specialist that helps organizations control and manage employee access and ensure security and efficiency. Its platform helps authenticate users and protect organizations against malicious threats and unauthorized digital access.

Okta has shown impressive growth over the years, with revenue rising from $1.3 billion in fiscal year 2022 (ending January 31) to $2.3 billion in fiscal year 2024. Gross margin has steadily improved from 69 .5% to 74.3%, with gross profit increasing from $904 million to 74.3% $1.7 billion over the same period. Free cash flow also improved tremendously, going from just $87 million in fiscal 2022 to $488 million in fiscal 2024.

Okta continued to show improvements in its revenue and gross margin in the first half of fiscal 2025. Revenue rose 17.6% year over year to $1.3 billion, gross profit increased 22 .6% year over year to $960 million. Gross margin continued its ascent, moving from 72.9% a year ago to 76%. Free cash flow increased 68% year-over-year to $292 million.

The number of Okta customers continued to grow, rising from 18,950 at the end of fiscal 2024 to 19,300 at the end of the second quarter of fiscal 2025. Customers with more than $100,000 in annual contract value increased from 4,485 to 4,620 in the same period. Remaining performance obligations, a key measure that is closely tied to future subscription revenue, rose 13% year-over-year to $3.5 billion at the end of the second quarter of fiscal 2025.

Management believes Okta has a long growth trajectory, with the company occupying only a small portion of a total addressable market of $80 billion. With more organizations digitizing and adopting cloud computing, Okta’s suite of services should see sustained and growing demand in the coming years, positioning the company for many years of growth.