Stocks that outperform the market usually share key traits such as rising sales, expanding margins, and increasing returns on capital. The select few that can do all three for many years are often the ones that make you life-changing money.
The bottom line is that over the long term, earnings growth goes hand in hand with the biggest winners. Keeping that in mind, here are three market-beating stocks that deserve a spot on your list.
Zscaler (ZS)
Five-Year Return: +121%
After successfully selling all four of his previous cybersecurity companies, Jay Chaudhry's fifth venture, Zscaler (NASDAQ:ZS) offers software-as-a-service that helps companies securely connect to applications and networks in the cloud.
Why Does ZS Stand Out?
- ARR growth averaged 24.3% over the last year, showing customers are willing to take multi-year bets on its offerings
- Forecasted revenue growth of 19.9% for the next 12 months indicates its momentum over the last three years is sustainable
- Robust free cash flow margin of 27.1% gives it many options for capital deployment
At $287.31 per share, Zscaler trades at 14.6x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
DXP (DXPE)
Five-Year Return: +576%
Founded during the emergence of Big Oil in Texas, DXP (NASDAQ:DXPE) provides pumps, valves, and other industrial components.
Why Do We Like DXPE?
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 34.6% exceeded its revenue gains over the last two years
- Returns on capital are growing as management capitalizes on its market opportunities
DXP is trading at $114.07 per share, or 20.3x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Medpace (MEDP)
Five-Year Return: +264%
Founded in 1992 as a scientifically-driven alternative to traditional contract research organizations, Medpace (NASDAQ:MEDP) provides outsourced clinical trial management and research services to help pharmaceutical, biotechnology, and medical device companies develop new treatments.
Why Do We Watch MEDP?
- Core business can prosper without any help from acquisitions as its organic revenue growth averaged 15.7% over the past two years
- Share repurchases over the last five years enabled its annual earnings per share growth of 36.7% to outpace its revenue gains
- Industry-leading 44.1% return on capital demonstrates management’s skill in finding high-return investments
Medpace’s stock price of $435 implies a valuation ratio of 35.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2024, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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