Investors looking to supercharge their portfolios often benefit from a broader stock search. One simple way to do that is to look at year-ahead earnings forecasts. Our hunt for the seven best stocks poised for magnificent earnings growth next year brought up names such as TG Therapeutics (TGTX) and RadNet (RDNT) — stocks far less obvious than Nvidia (NVDA), Meta (META), Apple (APPL) or the other megacap leaders that dominate the market.
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What Are The Magnificent Seven Stocks?
Seven Names Set For Magnificent Earnings Growth
Vertex Pharmaceuticals (VRTX): Vertex makes products to treat people with serious diseases, including Trikafta for cystic fibrosis. Analysts anticipate Vertex earnings per share will boom 5,642% next year to $18.58 per share, according to FactSet. This year, views call for Vertex earnings to crater after a huge loss in the second quarter, tied to the purchase of Alpine Immune Sciences. Top-line growth continues to slow, seen rising 9% in 2024 and 8% in 2025. Vertex stock earns a Composite Rating of 83 and RS Rating of 60, both out of a best-possible 99. It has jumped 17% so far this year. Shares are in an 11-week consolidation, near all-time highs.
Biotech Companies Among Best Stocks
TG Therapeutics (TGTX): A commercial-stage biopharmaceutical company, TG sells a multiple sclerosis treatment called Briumvi. Analysts forecast TG will see a 1,316% earnings-per-share surge in 2025, recovering from a sharp decline this year. The company has made a recent turn to profits. Sales are seen growing 41% in 2024 and 49% in 2025. TG Therapeutics stock shows a Composite Rating of 93 and RS Rating of 96. It has surged 28% so far this year. Shares trade far below all-time highs.
Semtech (SMTC): The company supplies high-performance semiconductors and other products for the infrastructure, industrial and consumer markets. Analysts expect Semtech earnings per share to boom 142% next year, after a strong comeback in 2024. It saw an earnings collapse in 2023. Sales are seen jumping 21% next year. Semtech stock holds a Composite Rating of 81 and RS Rating of 94. It has soared 94% so far this year.
RadNet (RDNT): RadNet runs diagnostic imaging facilities. Forecasts call for the medical company to grow earnings per share 120% next year after an impressive turnaround in 2024. It saw earnings crumble in 2022 and 2023. The top line bears watching. Analysts see sales rising 10% in 2024 and 9% next year. RadNet stock earns a Composite Rating of 87 and RS Rating of 96. It has zipped 87% higher so far this year. Uber stock popped
Uber Stock Rides Onto Best Stocks List
Uber Technologies (UBER): The disruptive Uber app pioneered a way to provide ride-hailing and ride-sharing services using smartphones. In 2023, Uber delivered an annual profit, after years of losses, which in part reflected the pandemic hit to travel. Analysts forecast Uber earnings per share will more than double next year, vaulting 111%, after jumping 24% this year. Analysts see sales growing 16% both this year and next. Uber stock shows a Composite Rating of 80 and RS Rating of 86. Shares jumped 9% to a 52-week on Friday while Tesla (TSLA) slid almost 8%. The Tesla Robotaxi unveiling event on Thursday removes an overhang on Uber, some analysts said. Uber stock is now up more than 35% so far in 2024.
GE Vernova (GEV): Spun out as an independent company in April, GE Vernova houses the energy assets of the old General Electric. This once-embattled business is seeing end markets recover. GE Vernova has guided growth across business segments, helping it join the best stocks list. Analysts expect earnings per share to boom 110% next year on 6% sales growth. GE Vernova stock flourishes a Composite Rating of 94 and RS Rating of 97. It has almost doubled since its April debut.
Gilead Sciences (GILD): The biopharmaceutical company’s biggest moneymaker is an HIV treatment called Biktarvy. It also makes Covid treatment Veklury. Analysts forecast Gilead earnings per share will soar 91% next year, stemming three years of declines. Sales growth flatlined around $27 billion for several years but is seen ticking higher — up 2% this year and 1% next year. Gilead stock shows a Composite Rating of 86 and RS Rating of 81. It is up 5% so far this year. It remains well below all-time highs.
Universe of S&P 500, S&P 400 and S&P 600 Stocks
A little background on IBD’s process to select the best stocks for magnificent earnings growth:
We began our screening process with the S&P Composite 1500 index, which aggregates the S&P 500, S&P MidCap 400 and S&P SmallCap 600 companies. We chose this index, in part, because it avoids less-liquid, lower-priced and lower-quality names, while efficiently measuring the total U.S. stock market.
Then we limited the stocks on our best stock list to those showing FactSet consensus ratings of overweight or buy, which means analysts expect them to outperform industry peers. Next we further winnowed down the list, setting up a double hurdle: The stocks had to enjoy some of the strongest FactSet earnings growth estimates for the following fiscal year, while also earning high IBD ratings, in terms of their Composite Rating and RS Rating.
The resulting seven best stocks for outsize earnings growth are a quite different set from the Magnificent Seven stocks. At the same time, these stocks are worth watching as much as any of the Mag Seven stocks given their outperformance potential.
To find other ideas for the best stocks to buy or watch, check out IBD Stock Lists and other IBD content.
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