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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. Keeping that in mind, here are three market-beating stocks with room for further growth.

Zscaler (ZS)

Five-Year Return: +219%

After successfully selling all four of his previous cybersecurity companies, Jay Chaudhry's fifth venture, Zscaler (NASDAQ:ZS) offers software-as-a-service that helps companies securely connect to applications and networks in the cloud.

Why Are We Backing ZS?

1. Customers view its software as mission-critical to their operations as its ARR has averaged 26.7% growth over the last year

2. Forecasted revenue growth of 19.7% for the next 12 months indicates its momentum over the last three years is sustainable

3. Robust free cash flow margin of 28.7% gives it many options for capital deployment

Zscaler’s stock price of $243.71 implies a valuation ratio of 13x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

Lam Research (LRCX)

Five-Year Return: +236%

Founded in 1980 by David Lam, the man who pioneered semiconductor etching technology, Lam Research (NASDAQ:LRCX) is one of the leading providers of wafer fabrication equipment used to make semiconductors.

Why Are We Positive On LRCX?

1. Highly efficient business model is illustrated by its impressive 29.6% operating margin, and its rise over the last five years was fueled by some leverage on its fixed costs

2. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety

3. ROIC punches in at 63.1%, illustrating management’s expertise in identifying profitable investments

Lam Research is trading at $84.70 per share, or 22.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Vertiv (VRT)

Five-Year Return: +852%

Formerly part of Emerson Electric, Vertiv (NYSE:VRT) manufactures and services infrastructure technology products for data centers and communication networks.

Why Is VRT a Top Pick?

1. Existing business lines can expand without risky acquisitions as its organic revenue growth averaged 18.5% over the past two years

2. Free cash flow margin expanded by 6.5 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends

3. Improving returns on capital reflect management’s ability to monetize investments