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Parts of the stock market appear to be in a bubble right now, especially speculative AI and meme stocks. But that doesn’t mean there aren’t ISA opportunities out there for patient, long-term investors.
Here are two growth shares that I think are worth checking out today.
Musk backlash
Let’s start with the most topical, which is Netflix (NASDAQ:NFLX). As I type, the stock has fallen over 14% since the start of July.
In recent days, Netflix has come under fire from Elon Musk, who has repeatedly urged followers to boycott the platform. This relates to a transgender character in an animated show from two years ago.
Now, Musk obviously has a very large presence on social media, so it’s theoretically possible that a couple of million outraged followers could cancel their Netflix subscriptions.
However, my suspicion is that this won’t make much of a dent. At the end of 2024, when the company stopped reporting user growth, it had over 301m subscribers worldwide.
Besides, all this has probably come too late to impact Q3 numbers. It may show up in Q4 figures if this story rumbles on, but the main growth driver at Netflix nowadays is ad revenue. And that’s unlikely to stop rolling in over this issue, in my opinion.
Strong growth
Later this year, Netflix will air the final season of Stranger Things and Guillermo del Toro’s Frankenstein. Will fans really boycott such shows because of a transgender-related row on X? Possibly. But again, I reckon none of this matters to the long-term investment case.
In Q2, revenue rose 16% to $11.1bn. The operating margin came in at a very healthy 34.1%, while the full-year revenue forecast was increased slightly to $44.8bn-$45.2bn. That would represent solid growth of 15%-16%.
Advertising revenue is forecast to double this year, while the cheaper ad-supported tier should tempt in more subscribers as the long winter nights set in. Speaking of which, I’m going to watch House of Guinness over the weekend.
Netflix stock isn’t cheap (it never has been). But at 36 times next year’s earnings — falling below 30 by 2027 — I wouldn’t call it obviously overpriced. I only see Netflix getting stronger.
Rising sportswear star
The second growth stock I reckon is worth a look is On Holding (NYSE:ONON). This is the Roger Federer-backed premium sportswear brand.
The share price is down 30% since the end of May.
Now, it’s worth highlighting that this probably relates to the ongoing tariff uncertainty and weak sales across the sportswear industry. These both add an element of risk moving forward.
Despite this challenging backdrop, On is managing to grow at a rapid clip. In Q2, sales surged worldwide, resulting in a 32% increase overall (38.2% on a constant currency basis). Margins actually increased due to the firm’s premium pricing strategy.
For the full year, management expects sales to increase at least 31%. And the company sees a massive future opportunity to increase its apparel/accessories sales, as well as its share of the global premium footwear market.
As for valuation, we’re looking at a forward earnings multiple of around 27. That’s not very expensive for a profitable firm growing its top line at more than 30%!
As such, I plan to buy this growth stock for my ISA in the coming days.
