If you are new to it and are just starting to invest in the stock market, you might be wondering about investing in companies that make headlines about making people a ton of money. Most of the time, these growth stocks belong to the tech sector. However, the tech stock meltdown a few years ago has made the space a little too risky for many investors to consider.
That said, there are still opportunities to invest and get great returns. The key is to invest in high-quality growth stocks by studying the fundamentals and identifying the long-term winners. While there are plenty of undervalued tech stocks up for grabs for this purpose, I will discuss a stock in an entirely different segment of the economy: retail.
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Retail giant
Aritzia (TSX:ATZ), if you have been following the stock, is an interesting prospect to consider for growth-seeking investors. Aritzia is a $7.72 billion market-cap integrated design house of exclusive fashion brands. The company designs apparel and accessories for its extensive collection. Retail sales in the U.S. and Canada account for most of its revenue, while it generates significant cash flows from e-commerce sales.
The company has built a solid presence in the online space and has around 130 boutiques across North America. Its customer base in the U.S. has been growing over the years, and that is the kind of lucrative market that can make it a solid long-term winner.
The company’s recent financials paint a clearer picture of where the stock might be heading. For the quarter ending in February 2025, Aritzia’s revenue jumped by a massive 31% from the same quarter in the previous year. The company’s e-commerce sales picked up pace, growing by 42% in the same period.
The company also doubled its adjusted earnings per share, and its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin improved to 18% from 10.6% in the previous year.
As of this writing, Aritzia stock trades for $67.44 per share. It is up by a massive 87.72% from its 52-week low levels. The company’s investments in expanding its retail operations, digital marketing efforts, and improvements in the supply chain are paying off. The upward trend in its share prices reflects the success of its strategy.
The company looks well-positioned to stay relevant and keep growing in the years ahead. This means that, barring short-term headwinds due to macroeconomic factors, ATZ stock looks like a strong long-term winner to consider adding to your self-directed investment portfolio.
Foolish takeaway
Instead of chasing all the noise in the market, it is better to focus on businesses that look likely to expand, evolve, and become long-term winners. The real key to success as a stock market investor is having a long investment horizon. To this end, Aritzia stock might be a good choice for your self-directed investment portfolio.
If you buy and hold shares of Aritzia stock in a Tax-Free Savings Account (TFSA), you can set yourself up for significant and tax-free wealth growth over the years.
