3 Market-Beating Stocks with Competitive Advantages
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.
Long story short, there is a near-perfect correlation between consistent earnings growth and huge winners. Taking that into account, here are three market-beating stocks with room for further growth.
Datadog (DDOG)
Five-Year Return: +93.8%
Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ:DDOG) provides a software platform that helps organizations monitor and secure their cloud applications, infrastructure, and services.
Why Are We Bullish on DDOG?
- Customers view its software as mission-critical to their operations as its ARR has averaged 31.3% growth over the last year
- Market share will likely rise over the next 12 months as its expected revenue growth of 24.5% is robust
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
Datadog is trading at $271.87 per share, or 20.9x forward price-to-sales. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Brinker International (EAT)
Five-Year Return: +281%
Founded by Norman Brinker in Dallas, Brinker International (NYSE:EAT) is a casual restaurant chain that operates the Chili’s, Maggiano’s Little Italy, and It’s Just Wings banners.
Why Could EAT Be a Winner?
- Same-store sales growth over the past two years shows it’s successfully drawing diners into its restaurants
- Economies of scale give it some operating leverage when demand rises
- Free cash flow margin expanded by 1.9 percentage points over the last year, providing additional flexibility for investments and share buybacks/dividends
At $187.78 per share, Brinker International trades at 14.3x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Natera (NTRA)
Five-Year Return: +246%
Founded in 2003 as Gene Security Network before rebranding in 2012, Natera (NASDAQ:NTRA) develops and commercializes genetic tests for prenatal screening, cancer detection, and organ transplant monitoring using its proprietary cell-free DNA technology.
Why Is NTRA a Top Pick?
- Average unit sales growth of 19.3% over the past two years reflects steady demand for its products
- Earnings per share have massively outperformed its peers over the last five years, increasing by 18.2% annually
- Free cash flow profile has moved into positive territory over the last five years, indicating the company has passed a significant test
Natera’s stock price of $395 implies a valuation ratio of 18.3x forward price-to-sales. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.