Investing in quality growth stocks can help you generate outsized gains in the upcoming decade. It’s essential to identify companies with strong fundamentals, expanding addressable markets, and a widening earnings base to help you consistently beat the broader markets. Here are two such growth stocks you can consider buying with just $1,000 today.
Tidewater stock
Valued at US$4.8 billion by market cap, Tidewater (NYSE:TDW) provides support vessels to the offshore energy industry. It operates a fleet of marine service vessels and supports companies doing business in verticals such as oil and gas exploration, wind farm development, offshore drilling, and more.
In 2023, Tidewater reported sales of US$1 billion, up 56% year over year, while net income stood at US$97.2 million, compared to a loss of over US$20 million in the year-ago period. Its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) rose by US$220 million to US$386.7 million, while free cash flow soared by US$60.8 million to US$111.3 million in the last 12 months.
Tidewater attributed its top-line growth to an increase in day rates and the addition of Solstad vessels last July. It now expects sales in 2024 to increase at least 40% year over year with a gross margin of 52%.
Tidewater ended 2023 with a backlog of US$1.1 billion, with 75% of available vessel days contracted for the year. The company’s growth story is far from over, as analysts forecast adjusted earnings per share to expand from US$1.84 per share in 2023 to US$8.09 per share in 2025. If the stock is priced at 20 times forward earnings, it should gain over 80% in the next 12 months.
In addition to organic growth, Tidewater emphasized acquisitions remain a capital allocation priority, which should help it leverage shore-based infrastructure and benefit from economies of scale.
UiPath stock
In case you missed the bus on Nvidia, investing in UiPath (NYSE:PATH) will help you gain exposure to the artificial intelligence sector, one of the largest megatrends in the upcoming decade. Valued at US$12.8 billion by market cap, UiPath stock trades 73% below record highs, allowing you to buy the dip.
UiPath operates in the robotic process automation (RPA) space, where it enjoys a market share of 36%, according to market research company Gartner. Its portfolio of products and solutions is already deployed by several enterprises on the cloud. Despite an uncertain macro environment, UiPath might increase sales by 19% to US$1.6 billion in fiscal 2025. It is also forecast increasing annualized recurring revenue, or ARR, by 18% in the next 12 months.
Further, Gartner expects the RPA market to grow by 20% each year through 2030, which suggests UiPath may end 2030 with sales of more than US$7 billion, if it can maintain its market share.
Now, if UiPath can increase its earnings per share by 25% each year, its EPS should be close to US$6.20 per share in fiscal 2030. If the AI stock is priced at 30 times trailing earnings, PATH should surge by more than 700% from the current price.
