Stocks that outperform the market usually share key traits such as rising sales, expanding margins, and increasing returns on capital. The select few that can do all three for many years are often the ones that make you life-changing money.

It’s clear there’s a strong connection between sustained earnings growth and hall-of-fame returns. On that note, here are three market-beating stocks with room for further growth.

AppLovin (APP)

Return Since IPO: +456%

Co-founded by Adam Foroughi, who was frustrated with not being able to find a good solution to market his own dating app, AppLovin (NASDAQ:APP) is both a mobile game studio and provider of marketing and monetization tools for mobile app developers.

Why Does APP Catch Our Eye?

Software platform has product-market fit given the rapid recovery of its customer acquisition costs Highly efficient business model is illustrated by its impressive 42.8% operating margin, and its rise over the last year was fueled by some leverage on its fixed costs APP is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders

At $362.80 per share, AppLovin trades at 20.4x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

Badger Meter (BMI)

Five-Year Return: +313%

The developer of the world’s first frost-proof water meter in 1905, Badger Meter (NYSE:BMI) provides water control and measure equipment to various industries.

Why Are We Backing BMI?

Annual revenue growth of 20% over the last two years was superb and indicates its market share increased during this cycle Earnings growth has trumped its peers over the last two years as its EPS has compounded at 36.4% annually Strong free cash flow margin of 15.3% enables it to reinvest or return capital consistently

Badger Meter’s stock price of $247.75 implies a valuation ratio of 52.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Cardinal Health (CAH)

Five-Year Return: +191%

Operating as a critical link in the healthcare supply chain since 1979, Cardinal Health (NYSE:CAH) distributes pharmaceuticals and manufactures medical products for hospitals, pharmacies, and healthcare providers across the global healthcare supply chain.

Why Are We Positive On CAH?

Unparalleled scale of $222.3 billion in revenue gives it negotiating leverage and staying power in an industry with high barriers to entry Projected revenue growth of 8.4% for the next 12 months indicates demand will rise above its two-year trend Earnings per share have outperformed the peer group average over the last five years, increasing by 7.7% annually

Story Continues

Cardinal Health is trading at $155 per share, or 17.7x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.

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