10 Growth Stocks Ready for Long-Term Takeoff — Morningstar’s 2025 Undervalued Leaders
Morningstar has released its highly anticipated list of the 10 Best Growth Stocks to Buy for the Long Term, highlighting high-quality companies whose shares are currently trading below their fair value — meaning investors can potentially buy them at a discount.
The 2025 market theme has been dominated by AI expansion, which initially drove growth stocks higher. But as valuations became stretched, investors rotated into value stocks. Now, Morningstar says the growth category has become attractive again, trading at a 7% discount to fair value.
Why These Stocks Matter
All 10 companies meet Morningstar’s strict criteria:
✔️ They fall in the growth segment of the Morningstar Style Box
✔️ They appear on the Best Companies to Own list (wide moats, predictable cash flows)
✔️ They have strong management and smart capital allocation
✔️ They are undervalued versus Morningstar’s fair value estimates
Morningstar’s 10 Best Growth Stocks to Buy for the Long Term (2025 Edition)
Most undervalued to least undervalued
1️⃣ Coloplast (CLPBY)
• Price/Fair Value: 0.60 (40% undervalued)
• Medical devices leader — dominant in ostomy & continence care
• Strong global expansion strategy, especially in the US
• Long-term innovation track record
2️⃣ Tyler Technologies (TYL)
• Price/Fair Value: 0.72
• Leader in digital government software (schools, courts, cities)
• Highly fragmented market → Tyler dominates local government tech
3️⃣ BAE Systems (BAESY)
• Price/Fair Value: 0.75
• Europe’s largest defense contractor
• Benefits from rising global defense spending & geopolitical tensions
4️⃣ SAP (SAP)
• Price/Fair Value: 0.79
• Global leader in enterprise software
• Cloud transition (Rise with SAP) driving double-digit growth
5️⃣ Experian (EXPGY)
• Price/Fair Value: 0.81
• One of the Big Three credit bureaus
• Expanding into emerging markets + alternative credit solutions
6️⃣ CoStar Group (CSGP)
• Price/Fair Value: 0.84
• Owns the most powerful commercial real estate data platforms
• Huge competitive moat → Apartments.com, CoStar analytics
7️⃣ Ferrari (RACE)
• Price/Fair Value: 0.91
• Ultra-luxury performance brand with unmatched exclusivity
• Volume growing but controlled to protect prestige
8️⃣ Tradeweb Markets (TW)
• Price/Fair Value: 0.91
• Global leader in electronic bond & derivatives trading
• Benefiting from the massive shift toward digital marketplaces
9️⃣ Taiwan Semiconductor (TSM)
• Price/Fair Value: 0.94
• Largest chip manufacturer in the world
• AI, IoT, and high-performance computing driving decades of demand
TransDigm Group (TDG)
• Price/Fair Value: 0.95
• Supplies proprietary aerospace components
• Enormous pricing power due to high barriers to entry
Why This List Matters for Investors
Morningstar believes these stocks offer:
• Strong long-term growth
• Durable competitive advantages
• Reasonable or discounted valuations
• Leadership in essential global industries
• Protection against market volatility due to wide moats
This list is particularly useful for:
✔️ Long-term investors
✔️ Growth-focused portfolios
✔️ Those seeking undervalued high-quality companies
✔️ Anyone preparing for 2026 market positioning
Morningstar has released its highly anticipated list of the 10 Best Growth Stocks to Buy for the Long Term, highlighting high-quality companies whose shares are currently trading below their fair value — meaning investors can potentially buy them at a discount.
The 2025 market theme has been dominated by AI expansion, which initially drove growth stocks higher. But as valuations became stretched, investors rotated into value stocks. Now, Morningstar says the growth category has become attractive again, trading at a 7% discount to fair value.
Why These Stocks Matter
All 10 companies meet Morningstar’s strict criteria:
✔️ They fall in the growth segment of the Morningstar Style Box
✔️ They appear on the Best Companies to Own list (wide moats, predictable cash flows)
✔️ They have strong management and smart capital allocation
✔️ They are undervalued versus Morningstar’s fair value estimates
Morningstar’s 10 Best Growth Stocks to Buy for the Long Term (2025 Edition)
Most undervalued to least undervalued
1️⃣ Coloplast (CLPBY)
• Price/Fair Value: 0.60 (40% undervalued)
• Medical devices leader — dominant in ostomy & continence care
• Strong global expansion strategy, especially in the US
• Long-term innovation track record
2️⃣ Tyler Technologies (TYL)
• Price/Fair Value: 0.72
• Leader in digital government software (schools, courts, cities)
• Highly fragmented market → Tyler dominates local government tech
3️⃣ BAE Systems (BAESY)
• Price/Fair Value: 0.75
• Europe’s largest defense contractor
• Benefits from rising global defense spending & geopolitical tensions
4️⃣ SAP (SAP)
• Price/Fair Value: 0.79
• Global leader in enterprise software
• Cloud transition (Rise with SAP) driving double-digit growth
5️⃣ Experian (EXPGY)
• Price/Fair Value: 0.81
• One of the Big Three credit bureaus
• Expanding into emerging markets + alternative credit solutions
6️⃣ CoStar Group (CSGP)
• Price/Fair Value: 0.84
• Owns the most powerful commercial real estate data platforms
• Huge competitive moat → Apartments.com, CoStar analytics
7️⃣ Ferrari (RACE)
• Price/Fair Value: 0.91
• Ultra-luxury performance brand with unmatched exclusivity
• Volume growing but controlled to protect prestige
8️⃣ Tradeweb Markets (TW)
• Price/Fair Value: 0.91
• Global leader in electronic bond & derivatives trading
• Benefiting from the massive shift toward digital marketplaces
9️⃣ Taiwan Semiconductor (TSM)
• Price/Fair Value: 0.94
• Largest chip manufacturer in the world
• AI, IoT, and high-performance computing driving decades of demand
TransDigm Group (TDG)
• Price/Fair Value: 0.95
• Supplies proprietary aerospace components
• Enormous pricing power due to high barriers to entry
Why This List Matters for Investors
Morningstar believes these stocks offer:
• Strong long-term growth
• Durable competitive advantages
• Reasonable or discounted valuations
• Leadership in essential global industries
• Protection against market volatility due to wide moats
This list is particularly useful for:
✔️ Long-term investors
✔️ Growth-focused portfolios
✔️ Those seeking undervalued high-quality companies
✔️ Anyone preparing for 2026 market positioning