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 picks for the seven best stocks for magnificent earnings growth next year include Expand Energy and Take-Two Interactive Software — stocks far less obvious than Meta, Amazon, Tesla or other megacap names that dominate the market.
Seven Best Stocks For Magnificent Earnings Growth
TG Therapeutics: A commercial-stage biopharmaceutical company, TG sells a multiple sclerosis treatment called Briumvi, which has been driving growth. On a per-share basis, analysts forecast TG will see a 2,470% surge in earnings 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 64% in 2025. TG Therapeutics stock shows a Composite Rating of 75 and RS Rating of 96. It has surged 81% so far this year. That includes a 33.5% jump this quarter despite weak earnings. The stock fell sharply on Wednesday amid a broader market reversal. The Fed signaled a slower pace of rate cuts.
Expand Energy, Take-Two Join Best Stocks List
Expand Energy: The natural gas producer, formerly Chesapeake Energy, is a play on rising global energy needs, earning it a spot on the best stocks list. Analysts expect Expand Energy to nearly quadruple earnings in 2025, up 299%, after two years of sharp declines. Sales are seen more than doubling next year, vaulting 128%. Chesapeake Energy and Southwestern Energy completed their merger in October, expecting to deliver "significant synergies" in years ahead. On Oct. 30, Expand Energy increased its annual synergy outlook by 25% to $500 million, leading to a flurry of analyst price-target hikes. Expand Energy stock holds a Composite Rating of 50 and RS Rating of 84. It has advanced 23% so far this year amid improving fundamentals, helped by a 15% pop this quarter.
Take-Two Interactive Software: The video game holding company's franchises include Grand Theft Auto and Borderlands. It's poised for a 243% earnings-per-share recovery next year, after three years of expected and actual declines. Revenue is seen booming 44% next fiscal year after expected 5% growth in the current one, ending in March. Net bookings rose 2% in the latest quarter and the company guided net bookings rising to record levels over the next two years. As a result, this gaming software play enters the list of stocks for magnificent growth. Take-Two stock shows a Composite Rating of 53 and RS Rating of 83. It holds a 13% gain in 2024 including a 19% surge this quarter.
AI-Related Stocks GE Vernova, RadNet
GE Vernova: The General Electric energy spinoff is seeing end markets recover. It has guided growth across business segments, earning GEV a place on the best stocks list. GE Vernova missed Q3 earnings views but reaffirmed full-year 2024 guidance. William Blair analysts called Vernova stock a "a "top pick" for 2025, as artificial intelligence (AI) data centers consume vast amounts of energy. Wall Street expects Vernova earnings to boom 164% per share next year on 5% sales growth. GE Vernova stock flourishes a Composite Rating of 85 and RS Rating of 97. It has nearly tripled since its March debut. That includes a 28% gain in Q4 amid robust earnings.
RadNet: Forecasts call for the medical imaging company to more than double earnings per share next year, up 121%, following a big rebound in 2024. RadNet saw earnings crumble in 2022 and 2023. Analysts see sales rising 12% in 2024 and 8% next year. RadNet stock earns a Composite Rating of 84 and RS Rating of 92. It soared on earnings in November and has more than doubled this year so far, up 109%. Shares are up 5% this quarter after undercutting the 50-day line on Wednesday. RadNet's DeepHealth operating system integrates advanced AI (artificial intelligence) with imaging systems.
Lumentum, Semetech Also Tied To AI Growth
Lumentum: The company makes products for optical networking and laser applications, supporting rapid data needs driven by artificial intelligence and machine learning. Lumentum is poised for an earnings comeback starting in the current quarter after three years of hefty declines, earning it a spot on the best stocks list. Analysts project earnings will recover 55% per share for the fiscal year ending in June. They expect a further 136% earnings gain the following year on a 28% sales surge. Lumentum stock flourishes a Composite Rating of 75 and RS Rating of 95. In 2024 so far, LITE stock has rocketed 62%. That includes a 34% gain this quarter alone amid a big earnings beat.
Semtech: Semtech supplies high-performance semiconductor products, driving efficiency in AI data centers. Analysts expect Semtech earnings per share to boom 134% next year, after a strong comeback in 2024. Semtech saw an earnings collapse in 2023. Sales are seen rising almost 5% this year and jumping 22% next year. Semtech stock holds a Composite Rating of 85 and RS Rating of 98. Semtech stock has nearly tripled in 2024 to date, vaulting 191%. That includes a 38% earnings-driven surge in the fourth quarter.
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.
