3 Incredible Growth Stocks That Could Skyrocket This Year

You don’t need to chase the latest hot trend in technology to make lots of money in stocks. Buying shares of emerging consumer brands before they are widely recognized is one of the best investment strategies — ask Peter Lynch.

Three Motley Fool contributors were asked to come up with three promising long-term investments that also have near-term upside potential. Here’s why Cava Group (NYSE: CAVA), MercadoLibre (NASDAQ: MELI), and Dutch Bros (NYSE: BROS) made the cut.

The latest fast-casual star

Jeremy Bowman (Cava Group): Cava Group is one of the more intriguing IPOs to come on the market recently. It’s a fast-casual chain that’s drawn comparisons to Chipotle Mexican Grill for good reason.

Cava offers a similar menu to Chipotle, using Mediterranean cuisine instead of Mexican. It serves rolled-up pita wraps that closely resemble burritos, and it also offers bowls. Even its restaurant design resembles Chipotle’s with a minimalist industrial decor.

Cava’s financial results have also been impressive in its brief period as a publicly traded company. In its fourth-quarter earnings report, the company reported a 52.5% increase in revenue to $175.5 million, driven by an 11.4% increase in same-store sales and aggressive store openings, as its store base increased 30% to 309.

Other data points show its restaurants are also popular as average unit volumes, or the average annual revenue from its restaurants, was $2.6 million. That is stronger than most of its peers, and the double-digit comparable sales growth shows that number is rapidly moving higher.

On a generally accepted accounting principles (GAAP) basis, the company is minimally profitable. However, its restaurant-level profit margins are strong at 24.8% for 2023, indicating that GAAP profit margins should ramp up as the company expands and its corporate costs moderate.

Cava also has a strong management pedigree, with Panera Founder Ron Shaich serving as its chairman and one of its early investors.

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The stock has already soared this year, up nearly 70%, but it looks like a good bet to keep climbing as its…

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