High-Growth Stocks' Outlook Amid Trade Conflicts: An Analysis

Investors are cautious as high-growth stocks thrive, but potential trade conflicts could alter this trajectory. Top companies like ServiceNow, Toast, and Affirm are highlighted for growth despite challenges.

Date: 21-02-2025

AI Rating: 7

Growth and Market Conditions
Several high-growth stocks have recently rallied due to expectations of lower interest rates, positively influencing their stock valuations. However, potential tariffs and trade conflicts cast uncertainty over the market, which could alter investor confidence.

ServiceNow: Its adjusted revenue rose 23.5% in 2023, and analysts project a 22.5% increase for 2024, indicating strong revenue growth. EPS is expected to grow at a CAGR of 28% from 2024 to 2027, which signifies robust earnings potential. The company is likely to benefit from its resilient business model during economic downturns.

Toast: The company showcased significant revenue growth, with 60% in 2022 and 42% in 2023. Analysts expect a CAGR of 24% from 2023 to 2026. Although initially focused on low-margin payment processing, Toast is pivoting to higher-margin subscription services, further enhancing its growth prospects.

Affirm: Revenue for fiscal 2023 rose by 18%, while fiscal 2024 showed a significant increase of 46%. Analysts predict a CAGR of 28% from fiscal 2024 to fiscal 2027, indicating a positive outlook. Affirm’s adept positioning in the buy now, pay later market, alongside growing merchant partnerships, reflects its potential for sustained revenue growth.

Overall, while the potential for trade conflicts adds a layer of risk, the noted companies exhibit strong fundamentals and promising growth trajectories, making them attractive options for long-term investors.

Stocks: NOW TOST AFRM