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After 11-bagging in under 5 years, this growth stock has further to run

Last month shares in sports retailer JD Sports Fashion (LSE: JD) hit another all-time high after an upbeat trading statement led the company’s board to lift its full-year profit expectations. The leading retailer of sports, fashion and outdoor brands announced an update on performance following the Christmas trading period, revealing a continuation of a very positive first half to the year, which saw like-for-like sales growth of 10%.

1,193% rise

The Bury-based FTSE 250 firm now expects headline profits (before tax and exceptional items) to beat previous consensus estimates of £200m by up to 15% for the financial year just ended 31 January. However, preliminary results for the full financial year won’t be announced publicly until 11 April.

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The group’s share price has rocketed in recent years, rising from lows of just 30p in 2012 to last month’s record highs of 357.9p. A £10,000 investment in June 2012 is now worth a staggering £119,300. So what next for JD’s investors? Could it be time to bank those paper profits and convert them into cold hard cash, or should they continue to be greedy and hold on for further gains?

Further to run

Well, consensus estimates compiled by our friends in The City seem to agree with JD’s management with regards to pre-tax profits. They suggest a £96m improvement from last year’s £131.63m to £227.84m, with total sales revenue smashing the £2bn barrier at £2,216m. With further growth in both sales and earnings predicted for the next two years, the P/E ratio drops to a reasonable 17 by January 2019.

That being said, long-term shareholders sitting on huge gains will probably want to sell at this stage, and I can’t blame them for wondering if a severe market correction is just around the corner, especially in these uncertain times. At the same time I certainly wouldn’t deter growth investors from buying the shares as I believe they still have further to run.

$1bn milestone

Another FTSE 250 firm whose shares have rocketed in recent years is online payments company Paysafe Group (LSE: PAYS). The Isle of Man-based firm formerly known as Optimal Payments has enjoyed an incredible 948% share price gain over the past five years, reaching all-time highs above 470p last October.

In a recent trading update for the year to 31 December, the group reported continued strong momentum during the second-half of 2016. It continues to focus on building a portfolio of payment-related products and services to meet the evolving needs of businesses and consumers in a rapidly-changing payments industry.

Management now expects the group to exceed the $1bn revenue milestone for the year, with adjusted earnings anticipated to reach $300m for the first time. With strong growth expected to continue for the medium term, and the P/E ratio falling to just 10 this year, I would suggest growth investors take a closer look at Paysafe.

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Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.