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Investing & the Stock Market vocabulary · Stocks & Shares

Growth stock

Meaning in investing & the stock market, with examples

/ˈɡroʊθ stɑːk/nounCommon term

In investing & the stock market, growth stock means: A share in a company whose sales and profits are expected to grow much faster than the average, often paying little or no dividend because it reinvests its earnings.

In Turkish: büyüme hissesi, büyüme odaklı hisse

How it is used

Usually contrasted with value stocks, which look cheap on ratios such as P/E. Growth stocks often trade at high valuations and react strongly to interest rate changes. Fund managers describe their style as growth, value or a blend.

Example sentences

  1. Growth stocks fell sharply when interest rates started to rise.

  2. The software company is a classic growth stock: revenue is up 40 percent, but it pays no dividend.

Common collocations

  • growth stocks
  • growth investing
  • growth versus value
  • high-growth company
  • blue-chip stockA share in a large, well-known and financially strong company with a long record of stable earnings, often paying regular dividends.
  • P/E ratioShort for price-to-earnings ratio: a company's share price divided by its earnings per share. It shows how much investors pay for each unit of yearly profit.
  • small-capDescribing a company with a relatively small market capitalization, or its shares. The exact limit depends on the market and the index provider.
  • overvaluedPriced higher than its estimated real value, based on things like profits, growth or assets. It describes an opinion, not a proven fact.

More terms: Stocks & Shares

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This page explains English vocabulary for learners. It is not financial advice.