This year’s stock market rally has been better than many anticipated, and certain stocks have been booming. However, this alone is not why I think you should consider buying up some breakout stocks. There are quality businesses on the market that have solid growth runways and are seeing their tailwinds get stronger.
Stocks with quality underlying businesses rarely disappoint in the long run, so I think it is a smart idea to look deeper into these stocks. Many of these breakout stocks could climb further from here, and if the broader market keeps cooperating, I think investors here could realize market-beating returns in the long run.
FTAI Aviation (FTAI)
FTAI Aviation (NASDAQ:FTAI) leases and maintains aircraft engines and other aviation equipment. I believe this stock could continue its breakout, having already soared over 480% since September 2022. The aviation industry is riding powerful tailwinds, from the post-pandemic travel resurgence to Trump-era tax cuts that are letting people write off jets as business expenses.
In Q1, FTAI delivered stellar results with adjusted EBITDA of $164.1 million, up 29% year-over-year. Their leasing segment generated $104.8 million while aerospace products contributed an impressive $70.3 million at a 37% margin. Management expects leasing EBITDA to hit $425 million in 2024 and aerospace products to reach $250 million.
While FTAI now trades at a premium valuation, I think the stock has room to run if it maintains this momentum. Analysts also have kept their “Buy” ratings in place.
The company’s engine leasing and maintenance segments are clearly resonating with airlines and lessors. If FTAI can continue beating Wall Street’s estimates, I wouldn’t be surprised to see this high-flyer soar to even loftier altitudes.
Celestica (CLS)
Celestica (NYSE:CLS) provides design, manufacturing, hardware platform, and supply chain solutions to customers in North America, Europe, and Asia. The company is firing on all cylinders, with Q1 revenue of $2.21 billion blowing past estimates and adjusted EPS of 86 cents exceeding expectations. Celestica could keep riding the data center and AI boom wave. The supply chain sector is also still solid.
Celestica’s CCS segment (which includes semiconductors) saw growth driven by large scale customers, leading to 120 basis point year-over-year margin expansion. While the ATS segment saw some softness, key verticals like Aerospace & Defense still post double-digit growth. Plus, management sees the capital equipment business stabilizing with growth set to accelerate.
Given these powerful tailwinds, it’s no shock this under-the-radar stock has skyrocketed 305% over the past year alone. As long as data center and AI demand stay red-hot, Celestica could keep surging as it capitalizes on these megatrends.
First Solar (FSLR)
First Solar (NASDAQ:FSLR) manufactures solar panels and photovoltaic power plants. The company delivered stellar Q1 results, with EPS of $2.2, beating estimates by 20 cents, and revenue growing a robust 44.83% year-over-year to $794.11 million, surpassing expectations by $68.77 million.
I believe First Solar is a rare bright spot in the oversupplied, fiercely competitive solar industry. While many peers struggle with rock-bottom prices and factory underutilization, First Solar’s production lines ran near full capacity in Q1. The company’s unique thin-film technology and strong contracted backlog provide some resiliency against cutthroat pricing.
Megatrends like the global push for renewable energy and supportive policies in the U.S. and Europe should provide long-term tailwinds. First Solar is investing heavily for the future with a new $500 million R&D center to drive next-gen solar tech.
With EPS expected to double by the end of 2026 and 36% sales growth projected for 2024, I think First Solar’s momentum could have plenty of runway ahead if they keep executing.
The stock is up 105% in just the past six months.
High Tide (HITI)
High Tide (NASDAQ:HITI) is a leading retail-focused cannabis company. While many cannabis stocks have been no-go zones for investors due to cash burn and limited legal growth runways, High Tide is proving to be a rare outlier. I’ve been bullish on this stock for a year now, and it’s nearly doubled since then as momentum accelerates and investors recognize its standout potential.
In Q1, High Tide posted revenue of $94.55 million, up nearly 10% YOY. Adjusted EBITDA also hit a record high, and the company achieved breakeven net income – a major milestone. With negligible losses and expectations for profitability expansion next year, High Tide is bucking the cannabis trend.
Analysts project robust sales growth ahead, forecasting $391 million this year and $973 million by 2030, largely just from the Canadian market. I believe once U.S. legalization materializes and High Tide gains a stronger foothold in Germany, this stock could be a multi-bagger in the making.
Itron (ITRI)
Itron (NASDAQ:ITRI) provides smart metering and software solutions for utilities. The company is riding powerful megatrends like electrification, reindustrialization, and the digitalization of infrastructure that are driving robust demand for its Grid Edge Intelligence platform.
Itron knocked it out of the park in Q1, with revenue surging 22% to $603 million and adjusted EBITDA nearly doubling to $76 million. The company crushed earnings estimates by 40 cents per share and raised its full-year outlook.
I believe Itron is one of the highest-quality plays on the smart grid and utility digitalization trends. It also has a $4.3 billion backlog. That backlog number has fallen slightly, but it’s nothing to scoff at.
The stock has rallied 44% year-to-date, but I think there’s plenty of upside left. Analysts expect around 20% annual earnings growth over the next few years. At 26 times forward earnings, Itron isn’t cheap, but I believe it’s a reasonable price to pay for this much quality and visibility.
Impinj (PI)
Impinj (NASDAQ:PI) makes RAIN RFID products that are riding powerful megatrends. I believe their addressable market is poised to expand rapidly in the coming years as more industries turn to automation and digitization. Retailers are racing to streamline operations, while supply chain and logistics players are hungry for efficiencies. All of these sectors are prime candidates for Impinj’s endpoint ICs and reader ICs.
Management cited “green shoots” of recovering demand in Q1, with apparel, general merchandise, and other applications all perking up. Impinj’s strategic focus on enterprise solutions is clearly paying off, with major rollouts underway at key accounts. As RAIN RFID finds more use cases, I expect Impinj’s growth to accelerate.
The stock’s 77% year-to-date gain could be just the beginning as more investors wake up to this pick-and-shovel play on supply chain automation among breakout stocks.
Veeco Instruments (VECO)
Veeco Instruments (NASDAQ:VECO) makes advanced process equipment for the semiconductor industry. Its stock has skyrocketed nearly 80% over the past year, and I believe it’s just getting started as powerful tailwinds propel this company to new heights. Revenue grew 13.7% to $174.5 million.
The AI revolution and explosion of data centers are fueling insatiable demand for cutting-edge chips, and Veeco’s laser annealing and ion beam deposition tools are critical for manufacturing the most advanced semiconductors. With its served markets poised to surge past $1 billion, Veeco is primed to ride this megatrend.
What’s more, the U.S. government is showering the domestic chip industry with subsidies and tax breaks to reduce reliance on Taiwan. As a leading American semiconductor equipment maker, Veeco is a prime beneficiary of this onshoring push.
In Q1, Veeco posted strong results with record semiconductor revenue for the second straight quarter. Management is laser-focused on expanding the business, and the stock’s momentum could keep accelerating as these potent trends play out.
On the date of publication, Omor Ibne Ehsan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.