On The Hunt For Magnificent Earnings Growth? Check These 7 Stocks.

Investors looking to supercharge their portfolios often benefit from a broader stock search. One simple way to do that is to look at year-ahead earnings forecasts. Our picks for the seven best stocks for magnificent earnings growth next year include EQT (EQT), RH (RH) and RadNet (RDNT) — stocks far less obvious than Meta (META), Amazon (AMZN), Tesla (TSLA) or other megacaps that dominate the market.

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Seven Best Stocks For Magnificent Earnings Growth

GE Vernova (GEV): The General Electric energy spinoff is seeing end markets recover. It has guided growth across business segments, earning GEV a place on the best stocks list. William Blair analysts call Vernova stock "a "top pick" for 2025, as artificial intelligence (AI) data centers consume vast amounts of energy. Wall Street expects Vernova earnings to boom 164% per share in the year ahead on 5% sales growth. GE Vernova stock flourishes a Composite Rating of 91 and RS Rating of 97. It has more than tripled from its March 2024 opening price of $115. It's up 9.6% in this young year. 

AI Plays Include Lumentum, Semtech

Lumentum (LITE): The company makes products for optical networking and laser applications, supporting rapid data needs driven by artificial intelligence and machine learning. Lumentum is poised for an earnings comeback after three years of hefty declines. Analysts project earnings will recover 55% per share in the fiscal year ending in June. They expect a 136% earnings leap next year on a 28% sales surge. Lumentum stock flourishes a Composite Rating of 77 and RS Rating of 95. In 2025 so far, LITE stock is up about 5%, taking its rally in the past year to around 75%. 

Semtech (SMTC): Semtech supplies high-performance semiconductor products, driving efficiency in AI data centers. Analysts expect Semtech earnings per share to boom 134% in the year ahead, after a strong comeback this fiscal year, ending in January. Semtech saw an earnings collapse in 2023. Sales are seen rising almost 5% this year and jumping 21% next year. Semtech stock holds a Composite Rating of 88 and RS Rating of 97. Semtech stock has risen roughly 7% year to date and has more than tripled in the past year, vaulting 221%. 

RadNet Joins RH On Best Stocks List

RH (RH): The retailer, formerly known as Restoration Hardware, taps the high-end home furnishings market. It's poised to more than double earnings in the year ahead. Analysts forecast a 121% EPS increase after three years of expected and actual declines. Revenue growth is seen accelerating to 14% from a roughly 6% gain in the current year, ending in January. RH gave a bright revenue outlook in December despite a challenging housing market. RH stock shows a Composite Rating of 84 and RS Rating of 93. It holds a 3% gain in 2025 so far and has jumped 53% in the past year.

RadNet (RDNT): Forecasts call for the medical imaging company to more than double earnings per share in the year ahead after a strong 2024 comeback. RadNet saw earnings crumble in 2022 and 2023. Analysts see sales rising 12% in 2024 and 8% in 2025. RadNet stock earns a Composite Rating of 84 and RS Rating of 91. RadNet stock is up just 0.1% in this new year and still below the 50-day moving average. Shares more than doubled in the past year. RadNet's DeepHealth operating system integrates AI (artificial intelligence) with imaging systems, earning it a place on the best stocks list.

EQT, Geo Group Round Out The Best Stocks

EQT (EQT): A vertically integrated natural gas company, EQT focuses on the Appalachian basin. EQT has divested non-operating and midstream assets, allowing it to focus on the core business plan to generate free cash flow and reduce debt, JPMorgan analysts say. Further, EQT may benefit from the incoming Donald Trump administration's more favorable stance toward fossil fuels, helping it join the best stocks list. Analysts expect EQT earnings to more than double earnings in the year ahead, after a slide in 2024, as sales rebound 30%. EQT stock holds a Composite Rating of 79 and RS Rating of 88. It's up about 5% year to date and has advanced 24% in the past year.

Geo Group (GEO):  The company owns and manages correction and detention facilities. Private prison stocks could benefit from tougher immigration enforcement under President-elect Trump. Analysts project that Geo's earnings will leap 83% in the year ahead as sales jump 12.4%. Geo Group's earnings declined in 2023 and 2024 on anemic sales growth. Geo stock holds a Composite Rating of 85 and RS Rating of 97. It is up about 2% so far in 2025 and has soared 168% in the past year. Shares rocketed in November on Trump's U.S. election win.

Universe of S&P 500, S&P 400 and S&P 600 Stocks

A little background on IBD's process to select the best stocks for magnificent earnings growth:

We began our screening process with the S&P Composite 1500 index, which aggregates the S&P 500, S&P MidCap 400 and S&P SmallCap 600 companies. We chose this index, in part, because it avoids less-liquid, lower-priced and lower-quality names, while efficiently measuring the total U.S. stock market.

Then we limited the stocks on our best stock list to those showing FactSet consensus ratings of overweight or buy, which means analysts expect them to outperform industry peers. Next we further winnowed down the list, setting up a double hurdle: The stocks had to enjoy some of the strongest FactSet earnings growth estimates for the following fiscal year, while also earning solid IBD ratings, in terms of their Composite Rating and RS Rating.

The resulting seven best stocks for outsize earnings growth are a quite different set from the Magnificent Seven stocks. At the same time, these stocks are worth watching as much as any of the Mag Seven stocks given their outperformance potential.

To find other ideas for the best stocks to buy or watch, check out IBD Stock Lists and other IBD content.

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