Stocks that outperform the market usually share key traits such as rising sales, expanding margins, and increasing returns on capital. The select few that can do all three for many years are often the ones that make you life-changing money.

Long story short, there is a near-perfect correlation between consistent earnings growth and huge winners. On that note, here are three market-beating stocks with room for further growth.

TransDigm (TDG)

Five-Year Return: +84.3%

Supplying parts for nearly all aircraft currently in service, TransDigm (NYSE: TDG) develops and manufactures components and systems for military and commercial aviation.

Why Will TDG Beat the Market?

1. Core business is healthy and doesn’t need acquisitions to boost sales as its organic revenue growth averaged 9.5% over the past two years
2. Additional sales over the last five years increased its profitability as the 33.8% annual growth in its earnings per share outpaced its revenue
3. Strong free cash flow margin of 19.6% enables it to reinvest or return capital consistently, and its recently improved profitability means it has even more resources to invest or distribute

TransDigm is trading at $1,220 per share, or 28.8x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Keysight (KEYS)

Five-Year Return: +119%

Spun off from Hewlett-Packard in 2014, Keysight (NYSE: KEYS) offers electronic measurement products for use in various sectors.

Why Do We Watch KEYS?

1. Superior product capabilities and pricing power are reflected in its best-in-class gross margin of 63.3%
2. Robust free cash flow margin of 21.2% gives it many options for capital deployment, and its improved cash conversion implies it’s becoming a less capital-intensive business
3. Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures

Keysight’s stock price of $324.12 implies a valuation ratio of 30.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

AAR (AIR)

Five-Year Return: +184%

The first third-party MRO approved by the FAA for Safety Management System Requirements, AAR (NYSE: AIR) is a provider of aircraft maintenance services

Why Do We Love AIR?

1. Annual revenue growth of 18.6% over the last two years was superb and indicates its market share increased during this cycle
2. Expected revenue growth of 14.3% for the next year suggests its market share will rise
3. Earnings growth has trumped its peers over the last two years as its EPS has compounded at 19.5% annually

At $116.50 per share, AAR trades at 22.6x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More

ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.

Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.