2 Great Growth Stocks to Buy Right Now

Not all stocks have responded to the bull market in the same way. While many companies have followed the general trend of steady gains, some stocks are trading lower or even near all-time lows.

When looking for stocks to buy, whether stocks are down or up, it’s important to understand why these trends are happening and what that means for your portfolio. On that note, if you’re looking for the best stocks to buy right now, here are two names to consider for your buying list.

1. DexCom

DexCom (DXCM -40.66%) is a leader in diabetes care with its line of continuous glucose monitoring (CGM) devices used by patients around the world to monitor their blood sugar levels. Although the company is down about 10% from the beginning of the year, the business is doing exceptionally well.

As always, one has to look beyond the stock price and see how the company is performing, what its financials look like, and whether the value proposition is there for investors. In this case, DexCom is one of the dominant forces in the CGM space. It has seen tremendous growth in recent quarters since launching the latest generation of its flagship CGM, known as the G7.

The G7 is not only the most covered CGM on the market, but it also has the fastest warm-up time. Most patients pay $20 or less per month to use this device.

DexCom also offers other CGM devices. Among them is its new Stelo device, which was just approved for patients with type 2 diabetes who are not taking insulin therapy. The Stelo is also the first glucose biosensor in the United States to be cleared by the U.S. Food and Drug Administration for use without a prescription.

In its recent presentation at the American Diabetes Association conference, DexCom presented data demonstrating use cases for its CGM products not only in the type 1 diabetic population, but also in type 2 diabetic patients (both on insulin and off), and even in prediabetics. The data also highlighted the benefits of using its CGMs as an adjunct to therapies such as GLP-1 agonists, which some have worried could pose a threat to diabetes care companies like DexCom.

GLP-1 medications may provide answers for some diabetic patients, including reducing blood sugar levels. However, they are not the only solution and do not serve the same purpose as CGMs. Devices that provide detailed, real-time blood sugar information are essential to help diabetics and prediabetics manage their respective conditions. This creates a positive growth avenue for a market leader like DexCom, while highlighting the continued need for its products in a rapidly expanding addressable market as the incidence of diabetes increases worldwide.

Financially, DexCom earned about $639 million in profits over the past 12 months, with revenue of about $3.8 billion during that same period. Its operating cash flow totaled $803 million during that period, and its free cash flow was about $524 million. If you’re looking for a steadily growing healthcare giant with plenty of room to expand in its core markets — and one that’s profitable to boot — DexCom seems like a solid candidate for a long-term investment.

2. Monday.com

Monday.com (Mndy 0.79%) is trading up about 30% year to date, about double the total return of the S&P 500 since early 2024. The company provides a no-code/low-code software platform that helps customers build their own software applications and work management tools.

There are many reasons for businesses of all sizes to choose a no-code or low-code platform to build their own apps and solutions. With a no-code solution, businesses can build their own tools using an interface that requires no coding experience or training. With a low-code option, the organization can use its own resources to build apps while selecting additional code to integrate into specific apps as needed, but the business can still streamline project management, optimize visuals, and ensure functionality without getting too tech-heavy.

Monday.com leverages an efficient Software-as-a-Service (SaaS) model for all of these solutions, generating predictable and recurring revenue streams. In the last quarter, the company generated record quarterly cash flow, achieved double-digit revenue growth and demonstrated compelling customer retention rates.

Revenue for the quarter was $216 million, an increase of 34% over the prior year. Monday.com also generated approximately $7.1 million in net income, compared to a net loss of approximately $14.7 million in the same quarter of 2023. While Monday.com reported an operating loss of $5 million for the three-month period, it narrowed significantly from the operating loss of $23 million in the prior year quarter.

Meanwhile, net cash from operations was $92 million in the quarter, with free cash flow coming in at just under $90 million for the three-month period. Monday.com reported an exceptional overall net retention rate of 110%, a metric that indicates how well a company is doing at retaining revenue from existing customers. For customers with annual recurring revenue of more than $100,000, that net retention rate was even higher, at 113%.

It’s important to note that Monday.com is growing its customer groups that drive more revenue for the company. For example, its cohort of customers that generate more than $100,000 in annual recurring revenue grew 55% in the most recent quarter compared to the prior year. For investors considering a stake in the company, it’s important to understand that it’s a relatively young company (founded in 2012) and just entered the public markets in 2021.

Investors can see higher levels of revenue growth than those seen in more mature companies, while dealing with the growing pains of a younger company. Still, its financials are improving steadily, profitability is there, and cash flows look good. For investors with a long buy-and-hold horizon and a well-diversified portfolio, this top growth stock could be a tempting buy.