Growth Stock
Definition
A stock of a company expected to grow revenue and earnings significantly faster than the overall market.
Explanation
Growth stocks typically trade at premium valuations (high P/E, high P/S) because investors are paying for future earnings expansion. They reinvest profits into growth rather than paying dividends. Classic growth characteristics: 20%+ revenue growth, expanding addressable market, strong competitive moat, and founder-led management. Growth stocks outperform during periods of falling interest rates and economic expansion but underperform during rising rates (which compress growth multiples by increasing the discount rate on future cash flows).
How Stoquity Uses This
Stoquity incorporates growth stock analysis across its portfolio management platform, providing real-time monitoring and AI-powered insights for every portfolio.