Amidst a continued rally that saw stocks surge by 24% in 2023, the momentum persists into the current year. Year-to-date, as of March 21, the benchmark S&P 500 has climbed an additional 9.9%. Wall Street remains optimistic about the potential for declining interest rates, coupled with sustained economic growth in the United States.
Within this bullish environment, certain stocks have experienced outsized gains, with a select few already tripling the market’s year-to-date return. Among these standout performers are Meta Platforms (NASDAQ: META), Deckers (NYSE: DECK), and Netflix (NASDAQ: NFLX).
1. Deckers
Deckers has been capitalizing on robust demand for its popular footwear brands like Hoka and Ugg, distinguishing itself from peers such as Nike, which has faced challenges with sluggish sales and pricing trends.
In contrast, Deckers has encountered no such hurdles. In fact, its sales surged by 16% in the fiscal 2024 third quarter, ending on December 31. This starkly contrasts with Nike’s modest sales decline in its most recent quarter, illustrating why investors have shown strong enthusiasm for Deckers stock this year. Additionally, the company has been able to sell many of its products at full price, further highlighting its competitive edge. Gross profit margin soared to 53% of sales last quarter, up from 48% in the prior-year period.
Moreover, management raised its fiscal 2024 outlook for the second time last month. With low inventory levels, Deckers is poised for significant earnings growth and potential for higher stock returns in the future.
2. Meta Platforms
Just a year ago, concerns lingered among investors regarding Meta Platforms’ decelerating growth and escalating expenses. However, those worries have dissipated considerably over the past few quarters. The social media giant not only continues to expand its user base but also enhances the profitability of its advertising endeavors.
Despite fluctuations in advertising spending elsewhere, major advertisers are maintaining their presence on Facebook and Instagram platforms. This is evidenced by a notable 21% increase in ad impressions during the fourth quarter, contributing to a 25% surge in revenue. Coupled with significant cost-cutting measures (including a 22% reduction in employee headcount last quarter), Meta has set the stage for substantial earnings growth.
In 2023, net income soared by 69% to reach $39.1 billion. Adding to the positive sentiment, Meta also initiated a dividend, with the first payout reaching shareholders’ accounts in late March. This combination of strong financial performance and shareholder-friendly initiatives has been well-received by Wall Street.
3. Netflix
Don’t look now, but Netflix stock is finally climbing back toward the all-time high it set in late 2021. The streaming video giant has taken investors on a roller-coaster ride the past few years. Shares collapsed from approximately $690 to $170 as the pandemic growth hangover set in, and the company endured its first-ever back-to-back quarters of subscriber losses (in Q1 and Q2 2022).
It turns out that decline was just a temporary speed bump — year-over-year subscriber gains have accelerated for four consecutive quarters with 12.8% growth in Q4. Netflix now counts 260.3 million paying subscribers, up from 230.8 million at the start of 2023.
Wall Street is excited about the prospects for even faster growth ahead as Netflix’s advertising business matures and its account-sharing crackdown continues to reap benefits. As long as Netflix can keep boosting its subscriber base, cash flow, and operating margins, investors can expect to keep watching this stock deliver excellent returns.
