3 No-Brainer Growth Stocks to Buy in February

Source The Motley Fool

Buying shares of growing businesses through the stock market is an efficient way to multiply your money over decades. All you have to do is start with companies you're already familiar with that are demonstrating consistent growth in revenue and earnings.

Three no-brainer stocks to start with are Amazon (NASDAQ: AMZN), Chipotle Mexican Grill (NYSE: CMG), and Netflix (NASDAQ: NFLX). Let's find out what three Fool.com contributors have to say about these amazing businesses.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »

Amazon has multiple levers to generate shareholder returns

John Ballard (Amazon): Amazon has delivered incredible returns for shareholders over the last 20 years, but its online retail business is still operating in a massive, growing global market. Of course, Amazon is much more than e-commerce, with most of its $620 billion in trailing-12-month revenue generated from nonretail services like subscription services, seller fees, advertising, and cloud computing.

Amazon is one of the best wealth-creating investments you can own for the long haul because of its ability to capture different money-making opportunities outside of selling goods to consumers through its online store.

Out of all these revenue streams, Amazon generated nearly $50 billion in net profit over the last year. Because the company still has so much opportunity ahead to keep growing, the stock should continue to climb in the coming years.

Amazon is leading massive markets worth trillions. E-commerce is expected to be worth over $6 trillion this year, according to eMarketer. Amazon also holds over 30% of the $297 billion cloud services market, according to Synergy Research, which is still growing at double-digit rates as businesses migrate on-premises data systems to the cloud to use artificial intelligence (AI) services.

There's enough opportunity for Amazon investors to earn excellent returns for many years.

Still a growth stock, even without its star CEO

Jennifer Saibil (Chipotle Mexican Grill): Chipotle Mexican Grill had its thunder stolen when its star CEO left for the greener pastures of coffee king Starbucks, but astute investors are holding on anyway. And they've done well; Chipotle stock ended 2024 up 32%, beating the S&P 500 (SNPINDEX: ^GSPC).

The burrito king continues to wow its customers, generate higher revenue, and demonstrate strong profitability. In the 2024 third quarter, it notched a 13% year-over-year increase in sales, driven by a 6% increase in comparable sales plus new stores. Management noted that the third-quarter performance was led by a 3% increase in transaction growth, implying that inflation didn't keep customers away, and that the sales increase wasn't due merely to price increases, which many restaurant chains have instituted to keep up with rising costs.

Despite the pressured economy, operating margin expanded from 16% to 16.9% year over year in the third quarter, and adjusted earnings per share (EPS) increased from $0.23 to $0.27.

That's one of Chipotle's superpowers: It attracts an affluent clientele who love its premium, fresh ingredients and commitment to sustainability, and its fast-casual prices won't break the bank for this cohort. That makes it a resilient target market that keeps the orders coming.

It's rolling out new products, opening new stores, and expanding globally. The company opened 86 stores in the third quarter and is aiming for 7,000 stores in North America, up from 3,600 today. It recently started to test international waters, opening 18 stores in the U.K. and a handful in other European locations and inking its first franchise deal with an operator in Dubai. These will all drive higher sales over the next few years.

Chipotle reports earnings Feb. 4, and a positive report should send the stock higher.

The streaming leader is back

Jeremy Bowman (Netflix): Netflix may no longer be seen as the breakout growth stock it was in the 2010s, but the streaming leader is making the doubters regret giving up on the stock.

Since it bottomed out in 2022 after reporting subscriber losses in two consecutive quarters, the stock has jumped more than 400%.

However, Netflix has revamped its business since then, launching an advertising tier, getting into live events, and cracking down on password sharing with its paid streaming program.

As a result, the business is roaring again even as its legacy media competitors have struggled to gain traction in streaming, and Netflix just demonstrated that the business is firing on all cylinders. It added a record 18.9 million subscribers in the fourth quarter, torching the analyst consensus at 9.2 million, showing the wisdom of adding live events like the Tyson-Paul fight and two NFL games on Christmas Day. Additionally, it added at least 4 million subscribers in all four of its regions, showing its popularity is growing around the world.

Looking ahead, there are a lot of reasons to bet on its future and buy the stock in February. First, Netflix's streaming business model should deliver expanding profit margins, as the marginal cost of adding new subscribers is minimal. Netflix now expects its operating margin to improve to 29% in 2025, from 27% in 2024.

Netflix also announced another round of price hikes, a sign of confidence in the business, and it continues to invest in its advertising product, which still has significant growth potential. It also has the ability to earn more ad revenue through better targeting and adding more value to advertisers.

Given the challenges in the rest of the industry, Netflix looks as strong as it ever has. It's no surprise the stock is back at all-time highs. Expect the streaming champ to keep gaining.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

  • Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $381,744!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,357!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $531,127!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Learn more »

*Stock Advisor returns as of January 21, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jennifer Saibil has no position in any of the stocks mentioned. Jeremy Bowman has positions in Amazon, Chipotle Mexican Grill, Netflix, and Starbucks. John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Chipotle Mexican Grill, Netflix, and Starbucks. The Motley Fool recommends the following options: short March 2025 $58 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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