3 Growth Stocks That’ll Make You Richer in the Fourth Quarter (and

Since the end of the Great Recession in 2009, growth stocks have been off to the races — and with good reason. Sustained periods of historically low lending rates coupled with quantitative easing measures from the Federal Reserve have created an abundance of cheap capital that fast-paced companies have used to hire, acquire, and innovate.

Chances are that growth stocks still have plenty of runway left to shine. Right now, the following trio of fast-growing companies stands out for all the right reasons, and offers the potential to make investors a lot richer in the fourth quarter, and most importantly, well beyond.

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Square

With its share price retracing about 20% from its all-time high, fintech stock Square (NYSE:SQ) is the first growth stock to consider buying hand over fist for the fourth quarter.

For more than a decade, much of Square’s growth has been founded on its seller ecosystem. The company’s seller ecosystem provides point-of-sale solutions, data analytics, loans, and other tools to help predominantly smaller merchants grow their business. In 2012, $6.5 billion in gross payment volume (GPV) traversed Square’s network. But by 2019, the year prior to the pandemic, a little over $106 billion in GPV was registered. This year, GPV looks to be on pace to top $140 billion with ease.

The really interesting thing about the seller ecosystem is that it’s not just for small businesses any longer. As time has passed, businesses generating $125,000 or more in annualized GPV have accounted for more GPV on Square’s network. In the June-ended quarter, 65% of all GPV in the seller ecosystem derived from these larger businesses, which was up 10 percentage points from the same period in 2019.  Because this is a merchant fee-driven segment, bigger businesses will almost certainly lead to higher gross profits.

But from this point forward, digital peer-to-peer payment platform Cash App is Square’s greater growth opportunity. Downloads of Cash App have consistently outpaced rival Venmo in the U.S. over the past two years, and monthly active users (MAU) more than quintupled for Cash App to 36 million from 7 million in the three-year period ended Dec. 31, 2020.

Cash App not only speaks to a younger generation of banking customers, but it offers Square more opportunities to generate revenue. Aside from just merchant fees, Cash App collects revenue from bank transfers and investments. In fact, Cash App has become a popular app with which to buy or sell Bitcoin, the largest cryptocurrency by market cap.

The icing on the cake for Square is its pending acquisition of buy now, pay later service Afterpay. This deal will create a closed ecosystem that links Cash App with its seller ecosystem and could really supercharge margins. As a reminder, the company is already bringing in $55 in gross profit per MAU from Cash App, while spending just $5 to court each new user.

Suffice it to say, Square…