Don't Miss Out: 5 High-Growth Stocks for 2026

Owning high growth stocks is a great way to beat the market long term. It's kind of the foundation of the mly fool. So we want to go through a few of the high growth stocks that we love today. Going to do that with John Quas. We have five stocks and the criteria here was all of them are growing over a 30% compound annual growth rate over the past three years. John, what do you got first for us? >> Yeah, first I have Rubric that is ticker symbol RBRK. This is a cyber security company. It has grown at a 34% compound annual growth rate over the last 3 years. Um quarter 1 fiscal 2027 revenue was up 39% so even higher than that three-year keer. Subscription a uh annualized recurring revenue up 32%. So a little bit lower but still above that 30% threshold. So what makes this company different in cyber security? Most cyber security companies are trying to prevent an attack. That is just intuitive. Rubric takes a slightly different approach and says attacks are going to happen. They're going to get through successfully at some point. We want a way to help you store your data safely and get back up and online and running after successful attack. So you think about ransomware, things like that. I mean, they just hold you until you pay and then they finally release you so you can get up and running again. With Rubric, you don't have to do that. you have a backup and so you can just reboot from the backup and get going again. >> What is it? Is this just one of those businesses that's going to compound as there's more and more threats to, you know, digital assets in the future? >> Well, that is at least the hope of management here in in a way. I know that sounds funny to say, but uh CEO Bipolina, he really believes that we're entering an age where AI agents make the problem worse than it's ever been. And I think that I buy into that. I have a friend who's in and he put it to me this way. Imagine a one-person hacker team trying to break into your system versus a state sponsored group that is trying to break in. Right? The state sponsored group is way bigger of a threat because there's more people working. There's a budget there. But with AI agents, now that single person working can actually spin up potentially hundreds of AI agents to start probing and looking for vulnerabilities in your system. So now a single person is exponentially more dangerous than they were before. So the re the the thought process is even more attacks are going to be successful than they were in the past. Rubric wanting to just be that layer of protection that assumes there's going to be a problem at some point. Now, it doesn't just have backup and restore capabilities. It also has more products that it hopes to upsell on. Uh really working on identity, but you think about a company. I mean, you've got stuff in the cloud. You've got people trying to access from their own devices. There are many vulnerability points. So, they're trying to protect that whole system. Uh trading at 14 times sales. So for a cyber security company, a tech company, that isn't actually an outrageous valuation, especially in light of its growth rate. >> Yeah, it does seem like one of those companies is going to have tailwinds for a long time to come. Speaking of tailwinds for a long time to come, the first stock that I wanted to bring today is TKO Group. Now, I have not bought shares of TKO Group, but this is one of those that I've been kicking myself for over a year at this point because it seems like they have the right strategy long term. More things are becoming digital. Those are becoming in a lot of ways less valuable, right? Like now you can watch TV, you can watch anything, anywhere at any time. That makes watching a specific show less valuable than it was 15 or 20 years ago. What's not getting less valuable is live entertainment is actually doing stuff with other people and that's essentially the entire thesis around TKO group. So the big asset they have is the UFC but they have IMG which is an agency which is going to represent a lot of these people. Uh they have you know bull riding uh they have boxing and they're just going to keep amassing more and more of these assets. This is one of the reasons the company has grown at a compound annual growth rate of 63% over the past 3 years as they do just keep acquiring and amassing more assets. But as you have more of those assets, you also have more leverage over your distributors. And this is the big thing. They made the huge deal. I think it was $1.1 billion a year with Paramount uh to be to be streamed on their service. They've left ESPN. Not a lot of people leave ESPN and go somewhere else, but they got a huge check to do that. They've got a deal for the WWE or WWF, whatever the WWEs are in that wrestling world at this point. Uh that's a deal with Disney uh and ESPN. A lot of opportunities and a lot of leverage that they have when you have those popular sports. And the interesting thing to me with their assets they specifically have, it's not the NFL, it's not the NBA, but it's very niche popular, but like rabid fan bases who are willing to pay whatever for for these assets. And so I think that's going to be a phenomenal place to be long term as more of these in real life things becomes more and more valuable. >> Yeah. You think about differentiation and entertainment and live is where it is at. And to your point, some of these things, I mean, you think about bull riding, not a ton of people are into bull riding compared to the NFL, but those who are are really into bull riding. The same thing with wrestling and and so on. I mean, how are we still talking about Hulk Hogan all these years later? it just is very popular among that small base and having that live component where you've got to do it live. That that is really an advantage to the company and I'm shocked when you said over 60%. I was wondering how this company even qualified when you first pitched it. Over 60% compound annual growth rate. That is phenomenal. >> Yeah. And like I said that is going to be part of the acquisition. So it's not all completely uh organic. I do want to also acknowledge not the cheapest stock. 37 times forward earnings is where the stock is trading today. Uh but you know I think that there's opportunity for a lot of margin expansion as you do get some of those more media rights deals even as some of these niche sports. I mean why isn't some of them will end up on YouTube. Seems like there's a lot of money there and an even bigger potential audience than you have on something like Paramount Plus. So I think a lot of potential growth runway ahead. All right. What is the next stock you wanted to bring to the table? All right. I want to bring ELF Beauty to the table. This is ticker symbol ELF. Elf Beauty growing at a 32% compound annual growth rate over the last 3 years. This is a company that grew 36% for net sales in the most recent quarter. Only expecting 18 to 20% growth for the whole year. So, uh do keep that in mind. Now, this is not a company that I am personally a customer of. Uh I came to the conclusion a while ago that nothing is helping this. But, uh many people uh like E.L.F. products. Uh you know what it stands for, Travis? >> I don't. eyes, lips, and face. So those are the three primary categories. Yeah. Um that it deals with. And what I like about this is it is the low price leader. So the barrier to entry is very low. Experimentation is high because okay, this is as cheap as anything. Let me buy this and see if I like it. If you do like it, you tend to stick with it for a long time. And that is what has driven this market share growth for this company over the long term. Um you look at it, it is actually the number one brand for Gen Alpha, Gen Z and millennials. I think that that is really in its favor over the long term here. You think about some growth drivers, very low international presence right now. Only 21% of its business is international. Uh for many of these companies, it's twothirds of the business. So a lot of opportunity to grow that. And also one of the things I find intriguing, the three main categories, eyes, lips, face, it just entered into the hair product domain of cosmetics. There are people trying it and half of the people trying hair products are new to the ELF brand for the very first time. I think that could be an interesting tailwind. >> When you research companies like this, who do you defer to as a customer? >> Uh my my wife and daughters. And so, uh, they let me know that this is, uh, something that they actually personally like and it's why we thought that would be fun for our family to I own shares, full disclosure. Um, it's not just the growth, though. I mean, as a low price leader, it has a 12% operating margin. I think that's really good when you're playing on that end of the market to still have double-digit operating margin. Um, and you know what? If it stayed at that, if it stayed at a 12% operating margin and continue to take market share, I'd be happy with that as an investor. One of the hacks that you can feel free to steal if you are looking for investment ideas. Especially if you are a husband, look at where your wife is spending money. What what companies are those going to? Is it, you know, Target? Is it ELF Beauty? I have gotten so many different ideas from both the things that my wife spends money on and also the things that she's bought from me. So, uh, just a little, you know, I wanted to bring that up because we are deferring to our spouses when we're when we're talking about, uh, some of these and, you know, we do the financial research, but they al ultimately have often better ideas than we do. All right, let's talk about the next stock number four on the list. That is Robin Hood. I want to start with just an acknowledgement that Robin Hood has been on an absolute tear. Uh, and the stock is very expensive. So, on a trailing basis, enterprise value of sales is about 19 and the price earnings multiple is about 47. But this is a long-term growth company. So, if you don't own shares of Robin Hood today, maybe not the kind of company you build a full position today. You maybe start a little bit, uh, buy on pullbacks. That's the way that I built my position in Robin Hood over the last 3 years or so. But the tailwinds behind this company are absolutely crazy. And the thing that I like to say about Robin Hood is they've really grown up as a company in the last five or six years. So, you remember when they kind of came onto the scene, not only when they went public, but but just early pandemic days, you know, there was Robin Hood YOLO trading and most of the customers that had Robin Hood accounts at that time actually had between $500 and $2,000 in those accounts, very small accounts, but they were trading all the time. So, Robin Hood made most of their money on options trading and on crypto trading. And most of their customers didn't do particularly well because if you're day trading like that, you typically are not going to beat the market long term, especially in aggregate. But over the last few years, they really advanced by moving into credit cards. I mean, I'm a gold customer, so I have their Robin Hood Gold credit card. 3% cash back. You can't beat that. You know, that get also gets you an incentive to invest in a Roth IRA or to add more. There's bonuses sometimes if you bring money in from other accounts. So, I've been slowly adding assets to Robin Hood. My kids now have custodial accounts on Robin Hood. Those weren't even available six months ago. But the big thing that happened just this past week as we're recording is they have started to launch advisors, ret registered investment advisors on Robin Hood. The way this industry typically works is whoever your adviser might be if you have one or or you know you know family members who have one maybe even work in this space they work on top of someone else's platform. So like an air prize is an example. Thrivance is another company that's based here. Uh that's another example. They're going to, you know, be your adviser. They're going to pay the person that you talk to, but they're not going to hold your stocks. They're not going to, you know, they're going to use another uh underlying company to be that that brokerage, the technology solution, all that kind of stuff. That's essentially what Robin Hood is doing. They bought a company called Trade PMR. Now, they're connecting those customers that are already on Robin Hood with advisors. And I think this is one going to be one of those comp this these areas of growth because there's two sides of this marketplace. If you're an adviser, you have an incentive to go to trade PMR get access to Robin Hood customers. This is also a digital first solution. So, if you're an adviser and you're looking to build a new book of business, this could be a phenomenal way to do it and have much greater scale than you have just selling at your local country club or through your network or trying to, you know, the way that you would traditionally grow these these kinds of businesses. So, I think there's just so many tailwinds behind Robin Hood. I it makes me overlook the fact that the price is still really expensive. I think that is worth acknowledging, but sometimes great companies just cost a lot. growing up. You know, not all publicly traded companies grow up and I think that Snap falls into that category. Sorry to just throw them catching a stray out here. Um, Meta is one that I missed out on because I didn't think that that company was going to grow up and it turns out it did. Um, but this is another one trading when it was trading, you know, down in the single digits. I I thought, well, great value, but is the company ever going to grow up? I don't think so. The company has grown up. To your point, not all publicly traded companies grow up, but guess what? Your customers do. I think it is so smart to go into the financial advisor space, try to lock in those customers while they're young, and hopefully do a good job and grow with them over time. I think that is a great long-term driver. >> Yeah. And like you said, these are generational tailwinds behind Robin Hood because the average Robin Hood c customer is not 60, 70 years old like you get with a Charles Schwab or something like that's why, you know, you look at assets per account, Charles Schwab is going to be much, much higher. Interactive Brokers much, much higher than Robin Hood. But what is the direction of those assets? Robin Hood can grow much more quickly. I think they've got a lot of opport opportunity to pull in more of those customers. That's what that's what one of the pieces of this uh you know trade PMR and bringing advisors in does for them. But you're also going to grow as they grow their assets. So multiple levers of growth there kind of in the same thing. Okay. Final stock on our list. Marcato Libre. >> Marcato Libre, ticker symbol Mi. This of the three is the largest company that I'm bringing to the table, but it's also growing the fastest. A 37% compound annual growth rate over the last three years. And and that is with a foreign currency headwind that it's fighting against. It's actually growing much faster in local currency. Um, this is the everything of Latin America. It is the e-commerce marketplace. It is the logistics network. It is the financial technology hub. It is the place that you want to start a business. It is the advertising giant. It is increasingly so many things in its key markets and I just love this company up and down. What do you think about the valuation of Marcato Libre? Uh as we're recording right now, the stock is trading for about 50 times trailing earnings about 45 times forward earnings. Is that a concern as they have they've been they've scaled this business phenomenally but you know is that just too much to pay at some point? >> Well I I think that if you are looking down on the net profits I think that that can be a little bit misleading it just as it was misleading at a time for Amazon and other companies as well. I think if you looked at Netflix in the past that was a misleading metric. What you are looking for is the cash flows, particularly the operating cash flows of the business to start to gauge what the business is producing and what the valuation is relative to that. Really, it's trading at one of its cheapest valuations ever. When you look at the operating cash flow, if you look at sales, trading at under three times sales, um that is historically very cheap for this company. What the market has doubted is whether or not its margins are in a place of structural decline or if the margins are depressed because we're investing back into the business. Every investor is going to have to make that decision themselves. I see deliberate investment in the business that is going to grow the business and really it is paying off. you know, lowering the threshold for uh the free shipping. That is a headwind when it comes to profitability, but it paid off in one of its fastest growth rates in years in the most recent quarter. When you are talking about a company approaching $40 billion in trailing 12-month revenue, I mean, that is a a a big deal when you accelerate revenue growth. >> There's always trade-offs when you're looking at companies that are growing. How much do you analyze that bottom line, the profitability? I think you're right. management has said this is explicitly a trade-off that we're making. We could be more profitable, but we're deciding to grow more. Oftentimes, that pays off pretty well for investors. All right, let us know which stocks you like out of this group. Rubric, TKO Group, Elf Beauty, Robin Hood, and Marcato Libre. Leave your comments in the comment section below. Don't forget to subscribe to the Mly Fools channel here on YouTube. Thanks for watching everybody. See you here next time.