The S&P/ASX 300 Index (ASX: XKO) is a fertile hunting ground to find businesses that are growing quickly but still have plenty of time to go before they reach full maturity.
But there are a few ASX 300 stocks I'm backing to beat the wider market over the next 12 months and beyond.
Typically, businesses that are growing revenue at a fast pace are more likely to beat the market, in my view. It helps if those businesses have a large addressable market to grow into. Another positive would be if they can grow their profit margins as they become bigger.
I believe the ASX 300 stocks below are appealing options, which is why I own them in my own portfolio.
Lovisa Holdings Ltd (ASX: LOV)
I'd describe Lovisa as one of the most global companies on the ASX. It sells affordable jewellery which is targeted at younger shoppers. At the last count, it had 927 stores in 49 markets/countries.
The business has more than 200 stores in Australia and New Zealand. Excitingly, it has the potential to significantly expand its global store network because it has a presence in countries with much larger populations than Australia, such as the USA, the UK, Germany, Italy, China, and Vietnam. I think it can add hundreds of stores to its network in the coming years.
It continues growing at a pleasing pace despite the challenging economic environment. In the first 20 weeks of FY25, total sales grew by 10% year over year.
The FY24 result demonstrated the strength of its business model, with revenue growth of 17% and net profit after tax (NPAT) growth of 20.9%.
According to the Commsec forecast, the Lovisa share price is valued at 34x FY25's estimated earnings. I believe the company's sales growth could improve if the economic situation improves following interest rate cuts worldwide.
Temple & Webster Group Ltd (ASX: TPW)
Temple & Webster is an online retailer of homewares, furniture, and some home improvement products.
It already sells more than 200,000 products, most of which are shipped to customers directly by suppliers. This reduces the inventory and capital the ASX 300 stock needs to have to service the sales. The business' capital-light model allows it to generate strong cash flow.
The ASX 300 stock aims to reach $1 billion in annual sales between FY26 and FY28, thanks to a combination of at least $800 million in core furniture and homewares sales and at least $200 million in sales from its growth plays, including business-to-business and home improvement sales.
I'm excited by the company's potential to grow market share significantly as e-commerce adoption by Aussies continues, younger cohorts enter their higher-spending stage(s) of life, and a high level of marketing reaches more customers.
As an online business, the company is benefiting from AI usage, both internally and with customer-facing solutions. This boosts customer conversion and provides cost-based benefits.
With the ASX 300 stock getting bigger, its fixed costs are being spread across more sales, which is boosting margins. Its fixed costs were 11% of sales in FY24, and it's aiming to have fixed costs of less than 6% of sales by FY28.
I think this company has a very exciting future if it can continue gaining market share.
