3 Market-Beating Stocks Worth Investigating

The best-performing stocks typically have robust sales growth, increasing margins, and rising returns on capital, and those that can maintain this trifecta year in and year out often become the legends of the investing world.

The bottom line is that over the long term, earnings growth goes hand in hand with the biggest winners. On that note, here are three market-beating stocks with room for further growth.

Lam Research (LRCX)

Five-Year Return: +390%

Founded in 1980 by David Lam, the man who pioneered semiconductor etching technology, Lam Research (NASDAQ:LRCX) is one of the leading providers of wafer fabrication equipment used to make semiconductors.

Why Will LRCX Beat the Market?

1. Annual revenue growth of 19.8% over the last two years was superb and indicates its market share increased during this cycle
2. Disciplined cost controls and effective management resulted in a strong two-year operating margin of 31.9%, and its rise over the last five years was fueled by some leverage on its fixed costs
3. ROIC punches in at 64.5%, illustrating management’s expertise in identifying profitable investments

Lam Research’s stock price of $245.74 implies a valuation ratio of 40.4x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.

e.l.f. Beauty (ELF)

Five-Year Return: +277%

Short for "eyes, lips, face", e.l.f. Beauty (NYSE:ELF) is a developer of high-quality beauty products at accessible price points.

Why Does ELF Catch Our Eye?

1. Market share has increased over the last three years as its 45.7% annual revenue growth was exceptional
2. Earnings per share grew by 40.3% annually over the last three years and trumped its peers
3. Free cash flow margin expanded by 8.4 percentage points over the last year, providing additional flexibility for investments and share buybacks/dividends

At $85.00 per share, e.l.f. Beauty trades at 28.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

ServisFirst Bancshares (SFBS)

Five-Year Return: +94%

Founded in 2005 with a focus on serving underserved mid-sized businesses, ServisFirst Bancshares (NYSE:SFBS) is a bank holding company that provides commercial banking services to businesses and professionals through its subsidiary ServisFirst Bank.

Why Are We Positive On SFBS?

1. Annual revenue growth of 14.2% over the past two years was outstanding, reflecting market share gains this cycle
2. Demand for the next 12 months is expected to accelerate above its five-year trend as Wall Street forecasts robust net interest income growth of 19.2%
3. Annual tangible book value per share growth of 13.1% over the last five years was superb and indicates its capital strength increased during this cycle

ServisFirst Bancshares is trading at $81.99 per share, or 2.1x forward P/B. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

High-Quality Stocks for All Market Conditions

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.