Consistent sales growth is critical for a company’s success, as it’s the foundation of generating profits. Strong revenue generation allows companies to achieve scaling efficiencies, generate continuous shareholder value, and many other clear benefits.
And when it comes to top line strength, three companies – MercadoLibre MELI, Shift4 Payments FOUR, and Super Micro Computer SMCI – have been standouts.
All three have enjoyed solid revenue growth over the last several years and have seen recent positive earnings estimate revisions, with the latter reflecting optimism among analysts.
For those seeking top line compounders, let’s take a closer look at each.
MercadoLibre
Mercado Libre, a current Zacks Rank #1 (Strong Buy), is one of the largest e-commerce platforms in South America. Earnings expectations for the company have shot higher across the board.
The company’s top line growth has been difficult to ignore, with FY22 sales of $10.5 billion up more than 630% since 2018. Revenues have grown annually by double-digit percentages in each year throughout the period.
And the growth is slated to continue, with Zacks Consensus Estimates suggesting 32% revenue growth in its current year (FY23) and a further 24% in FY24.
MELI shares have enjoyed positive price action following its latest quarterly release, up 20% since the report date and widely outperforming the general market. The company posted a sizable 25% EPS surprise and reported revenue 5% ahead of expectations, with sales improving 30% from the year-ago period.
Shift4 Payments
Shift4 Payments is a provider of integrated payment processing and technology solutions. The company sports a Zacks Rank #1 (Strong Buy), with earnings expectations moving higher across all timeframes.
FOUR sports a solid growth profile, with earnings forecasted to climb 93% in its current year (FY23) on 32% higher sales. And peeking ahead to FY24, estimates allude to a further 25% earnings bump paired with a 30% revenue increase.
The company has already enjoyed rapid revenue growth, with FY22 sales of $1.9 billion up 160% since FY20.
Keep an eye out for FOUR’s upcoming release expected in early November; Zacks Consensus Estimates suggest a 60% improvement in earnings paired with a 28% revenue bump from the year-ago period.
Super Micro Computer
Super Micro Computer designs, develops, manufactures, and sells energy-efficient, application-optimized server solutions.
Like those above, the stock sports a favorable Zacks Rank #1 (Strong Buy), with the revisions trend particularly notable for its current fiscal year, up 94% since September of 2022.
Super Micro Computer’s growth has been blistering-hot, with FY23 sales of $7.1 billion 113% higher since FY20. The company generated $2.2 billion in quarterly revenue throughout its latest quarter, improving 33% year-over-year and 70% sequentially.
In addition, shares aren’t valuation stretched given the company’s growth trajectory, currently trading at a 17.9X forward earnings multiple. The company is expected to enjoy 31% EPS growth paired with a 37% revenue bump in its current year (FY24).
Bottom Line
Strong revenue generation leads to many positives, such as scaling efficiencies and meaningful earnings growth.
And when it comes to compounding revenue, all three companies above – MercadoLibre MELI, Shift4 Payments FOUR, and Super Micro Computer SMCI – precisely fit the criteria.
In addition to inspiring revenue growth, all three have enjoyed favorable earnings estimate revisions, indicating bullishness among analysts.
Super Micro Computer, Inc. (SMCI): Free Stock Analysis Report
MercadoLibre, Inc. (MELI): Free Stock Analysis Report
Shift4 Payments, Inc. (FOUR): Free Stock Analysis Report
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