Early-stage companies are not expected to have robust margins and cash flows, but prolonged cash burn can lead to wealth destruction for shareholders. Lucid Group (NASDAQ: LCID) is a prime example of this from the EV sector. This article focuses on pre-EBITDA growth stocks, which are companies with positive industry trends that are likely to break even at the EBITDA level within a year, leading to margin expansion and increased cash flows as they grow.
One such stock to consider is Blink Charging (NASDAQ: BLNK), which has seen a correction of over 50% in the last year but is expected to rally due to positive business catalysts. With revenue growth of 73% in Q1 2024 and a path to positive adjusted EBITDA by December 2024, Blink Charging is well-positioned for growth.
DraftKings (NASDAQ: DKNG) is another pre-EBITDA growth stock with significant potential in the iGaming and online sports betting market in the U.S. Expected to achieve EBITDA breakeven soon, DraftKings reported an adjusted EBITDA loss last year but projects positive adjusted EBITDA in the coming years, supported by acquisitions and market growth.
Lastly, Cronos (NASDAQ: CRON) is a cannabis stock with strong growth potential, having reported revenue growth of 30% in Q1 2024 and narrowing its adjusted EBITDA loss. With expansion into new markets and a focus on EBITDA margin improvement, Cronos is poised for growth in the next few years.
Overall, these pre-EBITDA growth stocks offer opportunities for investors to capitalize on future cash flow potential and industry tailwinds. The opinions expressed in this article are those of the writer, Faisal Humayun, who is a senior research analyst with expertise in credit research, equity research, and financial modeling.