3 Market-Beating Stocks with Impressive Fundamentals

The best-performing stocks typically have robust sales growth, increasing margins, and rising returns on capital, and those that can maintain this trifecta year in and year out often become the legends of the investing world.

It’s clear there’s a strong connection between sustained earnings growth and hall-of-fame returns. Keeping that in mind, here are three market-beating stocks that could turbocharge your returns.

Netflix (NFLX)

Five-Year Return: +82.9%

Launched by Reed Hastings as a DVD mail rental company until its famous pivot to streaming in 2007, Netflix (NASDAQ: NFLX) is a pioneering streaming content platform.

Why Will NFLX Outperform?

1. Global Streaming Paid Memberships have grown by 15.7% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
2. Excellent EBITDA margin of 29.8% highlights the efficiency of its business model, and its profits increased over the last few years as it scaled
3. Free cash flow margin jumped by 15.8 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

Netflix is trading at $93.99 per share, or 23.7x forward EV/EBITDA. Is now the right time to buy? See for yourself in our full research report, it’s free.

Napco (NSSC)

Five-Year Return: +127%

Protecting everything from schools to government facilities since 1969, Napco Security Technologies (NASDAQ:NSSC) manufactures electronic security devices, access control systems, and communication services for intrusion and fire alarm systems.

Why Do We Love NSSC?

1. Impressive 14% annual revenue growth over the last five years indicates it’s winning market share this cycle
2. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its improved cash conversion implies it’s becoming a less capital-intensive business
3. Returns on capital are climbing as management makes more lucrative bets

Napco’s stock price of $39.20 implies a valuation ratio of 27.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Interactive Brokers (IBKR)

Five-Year Return: +267%

Founded in 1977 and known for its sophisticated trading technology and global reach across 150+ exchanges in 34 countries, Interactive Brokers (NASDAQ:IBKR) is a global electronic broker that provides low-cost trading and investment services across stocks, options, futures, forex, bonds, and other financial instruments.

Why Is IBKR a Top Pick?

1. Impressive 22.8% annual revenue growth over the last five years indicates it’s winning market share this cycle
2. Incremental sales over the last five years have been highly profitable as its earnings per share increased by 28.8% annually, topping its revenue gains
3. Annual tangible book value per share growth of 20.1% over the last two years was superb and indicates its capital strength increased during this cycle

At $66.57 per share, Interactive Brokers trades at 28.2x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.