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Here are 3 UK growth stocks that I think could skyrocket

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Some people prefer to invest in dividend stocks and build passive income. But the problem with dividends is that that they cut into cash that could otherwise be used to grow the company. Instead, I prefer to take my money and invest it into great UK growth stocks. The Omicron variant has recently caused share prices to tumble, leaving lots of excellent companies cheaper to invest in than they otherwise would be.

Darktrace

After going public earlier this year and rocketing into the FTSE 100, the cybersecurity firm Darktrace (LSE: DARK) was the hot growth stock on everyone’s lips. But what goes up often comes down and sentiment seems to have soured with the share price correcting. I expected this to happen and it’s why I initially avoided Darktrace.

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But looking at the company’s financial statements, sales and revenue have remained strong, and the business is projected to grow by a further 38% over the next year.

Darktrace operates on a subscription-based business model, which I believe will come to serve it well over the long term. The longer clients use it, the more vital it will become to their IT systems.

These are of course just projections and may not come to fruition. Tech is very speculative and the risks are higher for companies without a proven track record. Even so, the Omicron flash crash has pushed the share price to its lowest point since July (451p) so I will definitely be picking up some shares soon.

Wise

Wise (LSE: WISE) facilitates cheap and easy transfers between currencies and bank accounts. This UK tech company also went public early this year and its share price also climbed high before falling back. It reached 1,150p in September but is 752p as I write. This is fairly common after an IPO as it takes time for a market to determine the true value of a share.

Just like Darktrace, I don’t think this fall represents failings in the business. Wise customer numbers surged this year and earnings doubled from those of 2020. But profit margins have shrunk as management has chosen to invest in developing new products and entering new markets.

There’s a chance that the shares could fall further still as the market settles on a fair price. Reduced travel over the next few years could also cut into earnings as fewer people need to convert currencies, pushing the price lower. Despite these risks, I think Wise offers an affordable and high-quality service while operating with low overheads and I’m eager to add it to my portfolio.

JD Sports

JD Sports (LSE: JD) has done very well in 2021. The sports clothing retailer opened more than 600 new stores globally and increased revenue to a record £3.8bn. Pre-tax profits even tripled from 2019. Right now, the share price is trading for 216p, down 7.95% from November but up 32% from 2020.

I do have one concern though. Because of issues around competition, JD has been ordered to sell one of its subsidiaries, Footasylum. The shoe company brought in an additional £232m in revenue for JD in the 2021 financial year, a contribution that will be missed.

Regardless, given its long history in the UK market, I consider JD Sports to be a safer investment than Darktrace or Wise and will be adding it to my portfolio too.

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James Reynolds has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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