Growth stocks have the ability to put rocket boosters under an ISA portfolio. But they can also quickly lose value if the company’s growth suddenly disappears.
Therefore, it’s important to look past any hype to try and understand whether a company’s growth is sustainable.
Here, I want to highlight a growth share that I think could deliver market-beating performance over time.
Taking market share
Applied Nutrition (LSE:APN) is a FTSE 250 firm with tremendous momentum. The supplements powerhouse has made multiple upgrades to its FY26 guidance, resulting in current expectations for £140m in revenue (approximately 31% growth).
Sales are booming, with all geographies seeing an increase in sales during the six months to 31 January.
- UK: +46%
- Europe: +38%
- International: +75% (including 110% sales growth in Latin America)
The only region where things are looking a bit dodgy right now is the Middle East (volumes are under pressure for obvious reasons). This has the potential to put a dampener on things when full-year results arrive later this year.
However, taking a multi-year view, I’m very optimistic this company can become larger. One reason is that the global fitness and health market is very large but still growing, and Applied Nutrition is taking market share in it.
While we remain a relatively small player on a global scale, our opportunity to grow is vast, and we are well-placed to continue taking market share, supported by structural tailwinds across the sector and our expanding distribution, consistent innovation and increasing brand recognition.
Applied Nutrition
To put some numbers on this, the profitable firm’s revenue is expected to be around £140m this fiscal year. But we’re looking at a global sports nutrition, health, and wellness market that’s projected to grow at an annualised rate of 8.1% to reach £279bn by the end of 2028.
What’s the firm’s secret sauce?
Speaking as a gym-going customer (and now shareholder), I can attest to the company’s product quality. I buy its flagship ISO XP whey protein isolate, which is an ultra-filtered, premium protein powder. Unlike most others, this stuff dissolves incredibly smoothly without leaving lumps. It’s a top-tier product.
Meanwhile, Applied Nutrition also owns Europe’s best-selling pre-workout drink brand ABE (All Black Everything). This is in leading supermarkets here and abroad, including Walmart.
Founder and CEO Thomas Ryder says: “ABE [is] now…available to buy in Tesco. When I started in this industry, I couldn’t imagine that pre-workout would be on the shelves of a national grocer. It is a clear sign of how far the category has moved away from appealing only to a niche customer base and moving towards something mainstream.”
I believe the company’s competitive edge lies in its trusted brand, product innovation (new flavours, formulas, partnerships, etc), and ambitious founder-led management team. Its first out-licensing agreement was recently secured with Morrisons for a GLP-1 friendly range of meals.
Today, the global sports nutrition market is extremely fragmented, with lots of poor-quality products knocking about online. Over the next decade, Applied Nutrition has a chance to consolidate this market through constant innovation and quality, gaining the trust of both athletes and serious gym-goers, as well as a growing pool of health-conscious consumers.
With the stock trading at a reasonable 17 times next year’s forecast earnings, I reckon it’s worth considering as a buy-and-hold ISA investment.
Ben McPoland has positions in Applied Nutrition.
