3 Stocks With Explosive Sales Growth and Strong Cash Flow

Key Points

• Huge sales growth is one indicator of business success. However, it is much more meaningful when paired with positive cash flow generation.
• Rivian Automotive is one stock that shows the possible dichotomy between these objectives.
• The three stocks below are among a small group of U.S. large-cap names that have achieved three-year revenue growth of over 50% and are cash flow positive.

Achieving fast revenue growth is impressive, but doing so while generating positive cash flow is the ultimate goal for many companies. These two objectives often work against each other, making it no small feat. Rivian Automotive NASDAQ: RIVN is a clear example.

Over the past three years, Rivian’s revenue has grown at a compound annual growth rate (CAGR) of nearly 350%. However, during that time, the company generated roughly -$15 billion in free cash flow (FCF). While performance improved in 2024, Rivian still has a long way to go.

Much of the cash burn stems from the company only recently achieving a positive gross margin on vehicle sales. Historically, Rivian didn’t charge enough for its cars to cover production costs—a strategy that fueled revenue growth but came at the expense of positive FCF.

The analysis below highlights three companies that, unlike Rivian, have paired rapid revenue growth with positive free cash flow. Each has delivered a three-year CAGR above 50%, placing them among the fastest-growing businesses in the market. More importantly, their growth is sustainable, supporting profitability and strengthening their financial foundation.

Royal Caribbean Cruises: Revenues Now Tower Above Pre-COVID Levels, Billions in Cash Flow to Boot

Royal Caribbean Cruises NYSE: RCL has seen its revenues increase at a massive three-year CAGR of nearly 121%. This figure comes as the company’s sales have recovered from their 2021 depths.

In 2021, the firm’s revenues were the lowest in over 25 years, with the COVID-19 pandemic still in full swing. In 2024, the company generated record revenues of just under $16.5 billion. This was over 50% higher than the company’s 2019 pre-pandemic sales.

From 2020 to 2022, the company’s total FCF was -$12 billion. In 2024, the firm is now solidly back on its feet in terms of bringing in cash, generating just under $2 billion in FCF.

Markets have greatly rewarded the stock, with shares up 133% over the past three years as of the Apr. 8 close. Now, the company has been able to get back to paying its dividend, which it suspended for over four years. It recently raised its dividend by 36%, the cherry on top of its recovery.

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DraftKings: Huge Revenue Growth Capped Off By Now Positive FCF

Next up is gambling stock DraftKings NASDAQ: DKNG. The firm's revenues have increased at a three-year CAGR of over 54%.

This comes despite the fact that in 2021, the firm achieved the fastest annual revenue growth in its history of 111%. The firm’s strong revenue growth since then shows how it has been able to maintain robust interest in its offerings. 

The firm has also made strong progress each year in its path toward profitability. In 2021, its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin was -120%. In 2024, that figure sat at just under positive 4%.

The company still has significant work to do in becoming profitable on a non-adjusted basis, with net income of -$507 million in 2024. However, it is now generating positive FCF, a testament to its strong execution in the past. 

DraftKings generated FCF of $408 million in 2024, the first time this number has ever been positive. Analysts expect continued progress, with average forecasts predicting over $850 million in FCF in 2025.

Li Auto: Revenues Grow by Nearly Five Times in Just 3 Years

Last up is Chinese EV company Li Auto NASDAQ: LI. Li’s three-year annual revenue CAGR sits at just under 75%. The firm’s revenue increased to nearly $19.8 billion in 2024 versus over $4.3 billion in 2021.

Similar to DraftKings, this rapid growth wasn’t due to the firm having a bad year in 2021. That year, revenues grew by 186%, faster than any year from 2022 to 2024.

Li is in rarified air, known as one of the world’s few profitable EV makers. The company’s adjusted operating margin has gone from -4% in 2021 to now around a positive 5% in 2024. 

Impressively, the company has actually generated positive FCF every year since going public. In 2024, the firm generated FCF of over $1.1 billion. Its earnings were also positive on an adjusted and non-adjusted basis.

Overall, these three firms have achieved a very substantial business feat: they have seen massive revenue growth while also now bringing in cold, hard cash.