A smattering of growth stocks inside a portfolio can really supercharge returns. And with the Stocks and Shares ISA deadline approaching, now could be a good time to inject a bit of growth into a portfolio.
Here are two under-the-radar growth shares worth thinking about.
AIM stock
First up is Boku (LSE:BOKU), an AIM-listed fintech specialising in local payment methods (LPMs). It helps merchants drive more sales from people paying for goods and services through their mobile phones. Boku’s network facilitates over 300 LPMs worldwide.
Believe it or not, more people today pay with a LPM than through Visa or Mastercard. Indeed, entire regions like Southeast Asia are effectively leapfrogging bank cards and going straight from cash to LPMs.
How? Well, unbanked people just go to a local store with cash and top up a digital wallet, which can then be used for e-commerce and streaming services.
What I like here is Boku’s roster of blue-chip customers — it calls itself the “payment network trusted by tech giants“. For example, it helps Netflix and Spotify reach more subscribers worldwide through bundling with mobile phone bills. It also supports Amazon in Japan.
Last year, Boku’s revenue grew 30% to $128.8m, while operating profit surged 205% to $18.9m. Bundling revenue jumped 71%. Management is confident it can continue growing revenue organically at 20%+ over the medium term.
Looking ahead, one key risk I see is that Boku’s take rate — the fees it earns on transactions — could come under pressure as competition intensifies. Last year, it stood at 82 basis points.
However, the stock has fallen 32% since October, putting it on a forward price-to-earnings (P/E) ratio of 19.7. For a fast-growing firm with potentially many years of double-digit growth ahead, I think that’s an attractive valuation.
FTSE 250
The second stock is Applied Nutrition (LSE:APN) from the FTSE 250. Backed by JD Sports Fashion, this is a founder-led sports nutrition and wellness company.
Now, the main worry I had when the firm went public in 2024 was competition. There’s just a ton of firms doing protein shakes, pre-workout drinks, and supplements. What gives Applied Nutrition an edge?
Well, it aims to be the world’s most trusted and innovative brand in the market. And it’s making great strides towards that ambition, with shelf space secured in Asda, Tesco, Sainsbury’s, and even Walmart in North America. It has launched a 53-product range of high-protein meals and snacks with Morrisons.
Speaking personally, I’m a regular user of the company’s creatine products. And recently I started taking Applied Nutrition’s ‘critical greens’ powder, which is packed with broccoli, celery, spinach, etc, and is therefore reassuringly disgusting (in a healthy sort of way).
Therefore, I do believe this trusted and innovative brand has an edge over rivals. Looking at the financials, this is becoming apparent, with full-year revenue of about £140m expected (roughly 31% growth and higher than previous market expectations).
A 26% operating margin is also very healthy (no pun intended).
While a spike in UK inflation wouldn’t help, this is an increasingly diversified global business (Latin America is growing strongly). And the global sports nutrition and wellness market is projected to grow at a compound annual rate of 8%, reaching £279bn by the end of 2028.
The forward P/E ratio here is just 18.3.
