Finding long-term growth stocks to buy and hold is becoming more and more difficult. Indeed, the growth rates of most companies have been negatively impacted by inflation and surging interest rates. As valuation multiples decline, so too does investor confidence in this space. That said, there are some long-term growth stocks to buy and hold that are exhibiting indications of revival, kicking off to a much-improved start in 2023 following a dismal year in 2022. This resurgence is largely attributed to the macroeconomic factors that have come into play. It is uncertain whether this marks a new bull market for growth stocks. However, there are three options with the potential to profit from the shifting economic landscape.
Long-Term Growth Stocks to Buy and Hold: Visa (V)
It’s earnings season. Accordingly, for giants like Visa (NYSE:V), investors are paying close attention to its results. Fortunately, Visa has seen impressive price action following its earnings report, as the company impressively brought in sales of $7.98 billion and earnings per share of $2.09. Both numbers surpassed forecasts. Notably, Visa was relatively unaffected by the banking crisis. To adjust to the swiftly developing fintech domain, Visa has broadened its services beyond conventional credit cards. Its growth has gradually revived in the post-pandemic period, with consumer spending on travel playing a significant role in this resurgence.
Visa’s financial results for the first quarter indicate a healthy growth in revenue and earnings. Profits for the corporation were greater than expected, coming in at $7.9 billion instead of $7.7 billion. Furthermore, its earnings per share $2.18 outperformed what analysts expected by about 8.5%. This impressive performance can be attributed to the resurgence of global travel, which resulted in a 24% year-over-year rise in cross-border volumes on Visa credit cards.
The past five years have seen impressive growth for Visa, with its revenue and adjusted profits per share growing at corresponding yearly compounding rates of 9.8% and 20.1%. The company’s net income margin has also improved, rising from 36% in fiscal 2017 to 51% in the last fiscal year, owing to a highly scalable business model.
Visa has an impressive track record of success and promising growth prospects. That alone tells me it can emerge as a winner as one of the top long-term growth stocks to buy and hold.
Alphabet (GOOG, GOOGL)
It’s a common misbelief that a progressive firm like Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) would sit idly after ChatGPT’s groundbreaking debut. However, Alphabet reacted promptly by introducing its own formidable AI chatbot, Bard.
Despite marginal revenue growth, the firm’s recent earnings of $1.17 per share and share buyback announcement bode well for investors. Plus, with a strategic focus on AI and other high-growth sectors, Alphabet ranks among the top growth stocks to buy and hold. Even better, the company just announced an additional $70 billion for stock buybacks in Q1. All indicating the company’s strong cash flow and confidence in its future. In addition, CEO Sundar Pichai mentioned the launch of its AI product, Bard, which will complement its search business.
Alphabet’s expertise in deep learning places the company in a strong position to lead the industry in the future. Despite the emergence of ChatGPT, Alphabet currently dominates the search engine market with a 93.37% share of search queries. Microsoft’s Bing is a possible rival, but it presently only accounts for a 10% fraction of Google’s market share, thereby highlighting Google’s superiority.
Shopify (SHOP)
Shopify (NYSE:SHOP) just said its latest revenue and profit surpassed forecasts. In fact, the company’s modified earnings per share decreased by a penny year over year, as its sales jumped 25% to $1.5 billion. Both numbers were better than expected by experts. From here, I believe that Shopify is an investment for the long haul that will pay off well thanks to the rapid expansion of the Amazon-like e-commerce sector.
Helping, analysts seem to like the stock here. For example, Loop Capital just raised its price target on SHOP to $69 from $60. Piper Sander raised its price target to $50 from $45. Oppenheimer raised its target to $70 from $65, as RBC Capital raised from $65 to $75.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.