growth company

noun

Definition of growth company 

: a company that grows at a greater rate than the economy as a whole and that usually directs a relatively high proportion of income back into the business

Examples of growth company in a Sentence

Recent Examples on the Web

For those investors who want to make a blanket investment in growth companies, the technology sector may no longer be the best bet. Danielle Chemtob, WSJ, "Facebook, Google Aren’t Tech Stocks? What That Means for Investors," 1 July 2018 Many investors see Adyen as a way to indirectly reach high-growth companies such as Uber Inc., Casper Inc. and Grab Inc. Adam Clark And, WSJ, "Payment-Tech Company Adyen Soars in European Market Debut," 13 June 2018 Still, sizable layoffs and moves to conserve cash typically are not the acts of growth companies that are having just a little trouble achieving their goals. Peter Eavis, New York Times, "Tesla Is Coming to Its Financial Senses. That Has Its Own Risks.," 13 June 2018 Plaxo was the first viral growth company to really succeed intentionally. Adam Fisher, WIRED, "Sex, Beer, and Coding: Inside Facebook’s Wild Early Days," 10 July 2018 Instead, the surge has been caused by a convergence of favorable business conditions, strong stock markets and investors’ hunger for high-growth companies. Maureen Farrell, WSJ, "IPO Market Posts Blistering First Half," 2 July 2018 An edtech growth company lighting up student financial services, #OneOfaKindness is the heart of its #awesome employee-centric, family-first approach. azcentral, "Top Companies to Work for in Arizona-Small Companies," 7 June 2018 Perhaps one of the more controversial changes among value investors is the drift toward growth companies. Michael Wursthorn, WSJ, "Value Investors Face Existential Crisis After Long Market Rally," 4 June 2018 The firm makes majority and minority investments in high-growth companies, with a focus on the technology sector. Ed Ballard, WSJ, "Vitruvian Buys Stake in Cybersecurity Company Darktrace," 15 May 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'growth company.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of growth company

1959, in the meaning defined above

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Last Updated

20 Oct 2018

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The first known use of growth company was in 1959

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More Definitions for growth company

growth company

noun

Financial Definition of growth company

What It Is

Growth companies are fast-growing, higher-risk companies. They tend to be young. Their stocks offer a higher chance of higher returns and a higher chance of losses.

How It Works

The nature of a company's business determines many of the characteristics of its stock, especially for growth companies. For example, blue-chip stocks are stocks issued by high-quality, large companies and generally have steady dividend payments. Their values don't "jump around" as much as shares of smaller, riskier companies like growth companies, generally speaking, and so conservative investors who like dividend payments and not much risk tend to avoid growth companies.

Growth companies are generally riskier than other types of companies, but their stocks also offer a chance at very high returns. These returns are often in the form of capital gains rather than dividends. Tech companies are generally good examples of growth companies -- they tend to reinvest all excess cash into their businesses and rely heavily on research and development of products that can be very lucrative but easily outdated.

Why It Matters

Deciding whether to buy stocks of growth companies, or which growth stocks to buy requires you to consider your goals in life, your age, your cash needs, future cash needs you might have (retirement, college, etc.), your tax situation, the nature of your other investments, and how much risk you're willing to take. For those willing to tolerate the risk, the rewards can be quite large (and the losses can be quite large).

Source: Investing Answers

growth company

Legal Definition of growth company 

see company

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