For board members and investors alike, revenue growth is one of the easiest ways to evaluate the long-term health of large publicly traded companies.
That growth can be very difficult to predict. Companies can attempt to ensure growth through diversification and risk management. There are many forces entirely outside of the control of corporate governance, however, such as changing commodity prices or an unanticipated shift in a market.
24/7 Wall St. reviewed the most recent three-year annual revenue changes of S&P 500 companies. Based on its 252.3% revenue growth in the last three years, Facebook is America’s fastest growing company. Netflix rounds out the list with a three-year revenue growth of 87.8%.
Advancements in computer processing power, data storage capacity, Internet access, and other technological developments have helped fuel rapid growth in the U.S. tech sector in recent years. This partially explains the strong representation of Internet companies among America’s fastest growing companies. Facebook, Skyworks Solutions, Micron Technology, TripAdvisor, and Netflix all rank among the fastest growing U.S. companies — for some, revenue more than doubled over the last three years.
Four of the nation’s fastest growing companies — Biogen, Alexion, Regeneron, and Gilead — are pharmaceutical companies. The development, testing, approval, and manufacture of many drugs is extremely lengthy and expensive. Despite these massive investments, sometimes the drug never reaches the market. In other cases, a single drug can account for a huge portion of a company’s revenue and growth.
Notably, Alexion produces Soliris, a treatment for the rare and life-threatening blood disease paroxysmal nocturnal hemoglobinuria. The drug costs approximately $400,000 a year per patient and is widely regarded as the most expensive in the world.
With historically low interest rates and stable job growth in recent years, the U.S. housing market continues to recover from the depths of the recession. The average 30-year conventional mortgage rate has remained under 5% over the last five years. As of August, the rate was 3.4%, well below the pre-recession levels of close to 7% and considerably lower than the historical peak of 18.5% in 1981.
The housing recovery largely accounts for the triple-digit growth over the last three years of homebuilding companies DR Horton and Lennar Corporation, in fourth and fifth place respectively. While the growth is certainly encouraging for the housing and construction sectors, the two homebuilders are the only companies on this list for which revenue is still below where it was 10 years prior.
To identify the fastest growing companies, 24/7 Wall St. reviewed the most recent three-year annual revenue changes of S&P 500 companies. All annual revenue figures were obtained from a Capital IQ screen accessed on September 30 2016. All other information came from financial documents filed with the Securities and Exchange Commission. To ensure that the growth of these companies is at least mostly organic, we excluded companies whose growth or revenue decline was likely due to large scale merger and acquisition activity. Such was the case for Dollar Tree and Allergan, for example. The revenue of each roughly doubled in the last three years due largely to a single acquisition. Similarly, Arthur J Gallagher & Co. was excluded because a significant portion of its growth came from numerous recent acquisitions.
These are America’s fastest growing companies.
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